LADBROKES SETS SIGHTS HIGH FOR 2014
26th September, 2013 at 02:41:36
Digital EBIT to grow to £ 40.6 million next year
The British land and online gambling group Ladbrokes
plc issued its interim management statement Thursday, revealing that digital profits are likely to be lower than market expectations but within a market range of £ 10 million - £ 14 million in 2013....but that things will be better next year.
Following it's recent announcement of a joint venture undertaking with Playtech, including the launch of a Playtech-powered casino
, The company expects EBIT from digital operations for 2014 to come in at £ 40.6 million, a significant improvement on this year's £ 27.5 million as its digital strategies and changes take hold.
"In Digital we have yet to see discernible improvements as we continue to work through a significant process of integration," CEO Richard Glynn commented. "As a result the Board believe that 2013 operating profit for the Digital division will be below current market expectations and within a range of £ 10 million to £ 14 million.
"Our Digital earnings have been disappointing, reflecting a lack of competitiveness in sportsbook, lower margins than planned and a greater disruptive impact than expected from the transition necessary to grow Digital for the long term."
On the retail (land) side of the business July 2013 was difficult, as predicted previously by the company, but since then machines performance has stabilised with some growth on an overall gross win basis.
Footfall has recovered with a significant improvement in OTC amounts staked, though results have driven lower than expected trading margins across the business, Management reported.
"The period since the end of H1 2013 has been challenging," Glynn said. "Following a difficult trading period for the sector in July, we have seen footfall normalise in our UK Retail business, an improvement in OTC amounts staked and reduced volatility in machines.
"We remain focused on the operational changes required to deliver momentum in the retail business and to achieve a fully integrated digital platform.
"These are on track to be completed between now and the early part of 2014. We remain confident that the strong foundations we are putting in place will drive performance during 2014 and beyond. "
Ladbrokes chairman Peter Erskine, said:
"Ladbrokes continues on its journey to modernise the business and make it fit for purpose in the rapidly evolving betting and gaming sector. While we are disappointed that the Digital results are still not where we anticipated they would be, the Board believes that the strategy is the right one and that the actions taken to date, along with those planned for the coming months, will drive the long term success of the business. We remain fully confident in this management team to deliver them.
"A strong belief in the ultimate success of these plans underpins our commitment to maintaining the dividend at its current level for 2013 and additionally, at least maintaining it in 2014."
The Ladbrokes report notes that on September 6 this year the company acquired Gaming Investments Pty Ltd, an online sports betting business in Australia (see previous reports). The acquisition was made through the company's newly formed Australian arm 'Ladbrokes Australia' for an initial consideration of A$22.5 million, approximately £ 13 million, plus an earnout payable at the end of 3 years which is based on the EBITDA for Ladbrokes Australia for the year ending 30 June 2016.
GIPL's business includes Bookmaker.com.au Pty Ltd, operator of the online bookmaker Bookmaker.com.au and Panda Gaming Pty Ltd, operator of an extensive racing and sports focused affiliate network in Australia.
Related News Tags: Bookmakers, Playtech, Ladbrokes