888 TALKS OFF SAYS LADBROKES
15th April, 2011 at 16:45:04
Acquisition talks abandoned, new CFO appointed and quarter one results released
PLC today announced that discussions initiated at the end of 2010 regarding a possible takeover of online gambling firm 888 have been terminated.
Discussions were initiated with a view to Ladbrokes boosting its online presence in the market, but the two companies have reportedly been unable to agree on price.
Ladbrokes Chief Executive Richard Glyn said "At the end of the day I simply decided it was not in the interests of shareholders."
Paul Leyland, an analyst at Investec Securities, said: "We believe walking way from 888 was the right thing to do in terms of price, regulatory risk and operational fit. However, Ladbrokes' lacklustre online performance demonstrates the scale of the job."
Ladbrokes announced, along with its Interim Management Statement for the three months ended 31 March 2011, the appointment of a new Chief Financial Officer. Ian Bull will join Ladbrokes from Greene King plc where he has been Group Finance Director since 2006. Bull's appointment will commence on 4 July 2011.
Fiscal Highlights for the three months ended 31 March 2011 included:
- Group net revenue - excluding High Rollers - up 2.3 percent, despite a poor Cheltenham Festival in March.
- Group operating profit - excluding High Rollers - up 1.9% to £49.2 million.
- Total Digital net revenue up 1.2% during the period with strong growth in both Casino and Bingo being offset by lower revenues in Sportsbook and Poker.
- Sportsbook amounts staked grew 6.4% year on year, with 11.3% growth in the UK.
- Casino net revenue up 23.9% on last year reflecting a 70.6% growth in player yield.
- Poker net revenue down 32.8% against last year.
- Bingo showed 18.8% net revenue growth in spite of a 19.9% decline in active players, with player yields up 48.6% reflecting success in the retention of more valuable players.
- Games net revenue was flat with a 6.2% decline in active players being partially offset by a 5.8% increase in yield.
- Mobile revenue grew by in excess of 250% year on year with 18% of Digital customers placing at least one bet through this channel in the period. Mobile represented 11% of total Sportsbook amounts staked in the period and generated 11% of all Digital new player signups.
Richard Glynn, Chief Executive, Ladbrokes PLC said: We expect the economic climate in the UK to remain challenging in 2011 with consumer confidence and disposable incomes continuing to suffer. Notwithstanding this, at this early stage in the year, the business is performing in line with the Board's expectations.
"The Group's strong balance sheet, strengthened management and clear strategy position us well to address the challenges of 2011. Our drive to make Ladbrokes favourite again has good momentum with continuing operational improvements, capital investment underway and encouraging trends exhibited in areas such as Bet In Play and mobile.
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