Ladbrokes Share Price: H1 Operating Profit Drops 19.8 Percent

on Aug 8, 2013
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iNVEZZ.COM Thursday, August 8th: Ladbrokes (LON:LAD), Britain’s second biggest bookmaker, today reported a 19.8 percent drop in operating profits for the first half of the year.

“Following a strong performance in 2012, we have continued to make good operational progress against our strategy which, disappointingly, is not reflected in our first half financial performance,” Richard Glynn, group CEO, said in a statement.
The group issued a profit warning in April due to weaker-than-expected first quarter results and digital turnaround costs.

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After taking adjustments into consideration, first-half net revenue gained 0.9 percent. A total of £21.8 million was deducted as exceptional costs driven by the transition to Playtech software product and marketing services.

First-half earnings per share were down 23.4 percent at 7.2p. Interim dividend was unchanged at 4.3p. Ladbrokes’ business took an expected hit of around £9 million from the introduction of a new tax on gaming machines in the UK.
The UK-based gaming and betting group has operations in five segments: UK Retail, European Retail, Digital, Core Telephone Betting and High Rollers, with Core Telephone Betting registering the highest drop in revenues among them during the first six months of 2013 – 55.6 percent.

The largest division, UK Retail, had 19.8 percent lower operating profits in the six-month period to June 30, resulting mainly from the lack of significant sports tournaments such as last year’s European football championship. Its performance, however, was described as “resilient” in the company’s interim report.
High expectations are put on the performance of the Digital division after a new ‘Vegas’ tab was added with 70 games available online and 25 on mobile, targeting mainly younger users.

!m[UK Bookmaker Says Digital Division Well Positioned for Earnings Growth](/uploads/story/4667/thumbs/pic11_inline.jpg)
“In Digital, our partnership with Playtech will see us deliver a compelling online and mobile offer for customers underpinned by proven software, operated by experts,” CEO Glynn said in the statement. “During H2 we will build on early progress already made by adopting Playtech products and technology and expect to benefit from new marketing and CRM capabilities.”
**Analysts on Ladbrokes**
Last week, Morgan Stanley reiterated its “equal weight” rating on Ladbrokes shares and gave the stock a price target of 215p.
Deutsche Bank reiterated a “hold” rating on Ladbrokes on July 26th. The company had a price target of 232p on Ladbrokes’ stock as of August 7.
Yesterday, the Ladbroke’s share price fell 1.29 percent to 207.30p.
**Ladbrokes’ share price was at 199.70p as of 08.08.2013, 08.40 BST. **

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Ladbrokes’ Shares Plunge on Unexpected Profit Warning
RBS Share Price: Investec Upgrades Bank’s Stock to ‘Hold’

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http://nvz.bz/1cgV29L

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