November 14, 2008

Ladbrokes' profits up 10% despite "challenging economic conditions"

Ladbrokes has revealed that group profit excluding telephone high rollers increased by 10% in the four months to 31 October, “despite challenging economic conditions.” Group gross win increased by 12% during the period.

Egaming net revenues increased 22% during the period, with strong growth across the sportsbook, casino and games, which the company said reflected its ongoing strategy of investing in new customer acquisition. The company said that poker performance “continues to reflect the highly competitive market”, and added that it was looking forward to joining the Microgaming network in the New Year.

UK retail gross win increased by 5%, with machine gross win rising by 14%, and the average weekly gross win per gaming machine rising to £677 compared to £586 for the same period in 2007. Over the counter gross win remained flat, “significantly impacted” by a run of poor results in the last two weeks of the period. Telephone betting net revenue, excluding revenue from high rollers, fell by 12%.

The company said the rate of shop openings in Italy, where it currently has 66 shops, has been slower than anticipated, but said it expected all to be fully operational by the year end. It added that the strike within the Italian horse racing industry which has been impacting recent trading has now been resolved. The company also opened an additional 20 outlets in Spain over the period, bringing Ladbrokes’ presence in the province of Madrid to 34.

Ladbrokes’ chief executive, Chris Bell, said, "Although a run of poor football and horse race results at the end of the period has affected performance, the group remains within the market expectation range for 2008."

Ladbrokes also announced that will shortly apply for leave, along with a group of bookmakers including William Hill and BetFred, to appeal against the ruling in its court case with Amalgamated Racing (AMRAC) and other parties, which alleged anti-competitive behaviour of the defendants in the course of creating Turf TV. The bookmakers claimed at the time of bringing the original legal action against AMRAC in September 2007 that the higher cost of providing Turf TV to their betting outlets compared to those under an arrangement with former supplier Satellite Information Services (SIS) was costing them an extra £50m a year.

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