By Mark Baber
May 2 – Whilst UK bookmaker Ladbrokes have been laying the foundations for the World Cup the company says that despite a 34% year-on-year increase in football staking, their first quarter profits have been hit by a winning streak by favorites in football matches, leading to big pay outs on accumulator bets.
Ladbrokes Interim Management Statement for the 3 months ended 31 March 2014 hails the company’s successful transition to the Playtech platform and large increases in mobile sportsbook performance.
Football betting now accounts for 75% of amounts placed on 5,500 self-service betting terminals – with a further 3,500 to be deployed before the World Cup.
Group net revenue has gone down by £6.5 million or -2.3% impacted by industry-wide results, blamed on “significant payouts, particularly on accumulator bets” as amounts staked have gone up by 8.5%. Gross win margin in Q1 was 16.2%, 2.7 percentage points down on last year. Nevertheless dividends will be at least 8.9p per share for the current financial year.
Richard Glynn, Chief Executive, commented: “It was pleasing to see OTC staking grow, driven by a strong performance in football.”
“Looking ahead, the build up to the World Cup will see heightened competition. We are now in position to compete hard, targeting customers through our brand and improved products along with aggressive but sensible offers and promotions.”
Whilst the company as a whole faces some difficulties over increased regulation, Ladbrokes hail their Grand National performance (“its biggest fit-for-purpose test in advance of the World Cup”) as demonstrating improved resilience and, with mobile up over 100% and Sportsbook sign-ups up 107%, providing a good omen for the tournament in Brazil.
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