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Ladbrokes share price: H1 profit sinks 43 percent

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Ladbrokes Plc (LON:LAD) today updated investors with half-yearly performance for the six months ended June 30. Following are the highlights of the company’s statement.

Headline(1) Statutory
Half year ended 30 June 2015 2014 2015 2014
£m £m Growth £m £m

Revenue 585.4 577.8 +1.3% 588.8 589.3
Group operating profit (2) /(loss) 38.9 56.8 -31.5% (37.2) 41.1
Profit/(loss) before tax 24.7 44.0 -43.9% (51.4) 27.7

Profit/(loss) after tax 22.2 39.6 -43.9% (41.4) 23.7
Basic EPS 2.4p 4.3p -44.2% (4.5)p 2.6p
Interim dividend per share 1.0p 4.3p -76.7% 1.0p 4.3p

• Results in line: with estimates published with new organic strategy and proposed merger announced in July
• Group net revenue: +1.3% (+4.2% ex. World Cup)
UK Retail: revenue +1.2% (+3.2% ex. World Cup). Underlying OTC staking trends improved, SSBTs a highlight; continued growth in lower staking machine play

Digital: revenue +6.9% (+12.4% ex. World Cup) driven by Australia and Gaming. Sportsbook KPIs strong but Q1 margins and POC tax impact profitability
European Retail: revenue -2.1% (+1.7% ex. World Cup) Belgium revenue growth continues; Republic of Ireland Examinership completed

• Group operating profit(2): -31.5% reflecting externally imposed headwinds (POC, MGD and grey market withdrawals); -0.5% underlying decline(3)
• Exceptional items: £78.9m, within previously announced range – including Retail impairments; UK shop closures and Examinership; primarily non-cash – leading to a statutory operating loss
Jim Mullen, Chief Executive, commented:
“Our first half results reflect the challenge facing Ladbrokes. While we have some encouraging customer trends, we need to reset the business and invest. The results clearly show why we need to change and why we need to do so quickly.
“In July, we set out an organic plan to create a better business in 2017 with clear targets. While doing this removes the short-term thinking that had come to dominate our actions, we recognise it does create short-term impacts on our profitability.
“However, our focus has to be about looking forward, investing and utilising our strengths to grow. There are signs in H1 that the customer is there to be convinced by the Ladbrokes offer – good Gaming performance, strong Mobile Sportsbook KPIs and growth in Australia. We have a solid base to build on.
“So going forward expect to see the Ladbrokes brand more prominent across the media, a retail driven multi-channel offer rolling out to more customers, an evolving and improved Digital offer and further progress in Australia.
“The proposed merger with the Coral Group represents an exciting opportunity for the business but, with completion some way away, the focus for me and my team must be on the here and now of delivering on our organic plan, building a better Ladbrokes and driving performance towards our 2017 targets.”
As of 07:13 BST, Tuesday, 11 August, Ladbrokes PLC share price is 110.00p.

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