Ladbrokes Posts Strong Half-Year Results Ahead of Merger
British gambling giant Ladbrokes announced its half-year results to the London Stock Exchange today, and they make happy reading for investors in the company.
��Helpful bookmaker friendly results,�� such as England��s early exit from the 2016 European Championships in France, helped Ladbrokes�� group operating profit increase by 34.4 per cent to ��52.3 million compared to the same period in 2015.
Net revenue increase 12.4 per cent compared to 2015 to ��661.8 million, helped by a huge 40.9 per cent increase in Ladbrokes�� digital division, a 6.4 per cent growth in its UK Retail arm, and a 7.3 per cent rise in its European betting shops.
| 2016 | 2015 | Growth | |
|---|---|---|---|
| Revenue | ��661.8m | ��585.4m | 13.1% |
| Group operating profit | ��52.3m | ��38.9m | 34.4% |
| Profit before tax | ��39.8m | ��24.7m | 61.1% |
| Profit after tax | ��34.9m | ��22.2m | 57.2% |
| Basic earnings per share | 3.4p | 2.4p | 41.7% |
Jim Mullen, Chief Executive of Ladbrokes, welcomed the positive results, but was quick to bring investors�� expectations back to Earth stating, ��130 years of experience in sports betting has shown us that we will endure a run of customer friendly results and margins will normalise.��
Mullen explained that like-for-like staking on the English Premier League grew 14.7 per cent year-on-year, and that despite paying out approximately ��3 million to people who had bet on Leicester City to win the title, some at odds of 5000/1, the league was unpredictable and ��week in week out customers�� accumulators and coupons were victims of surprise results.��
The favorable football results offset what was described as the worst Cheltenham Festival (horse racing) on record, and both the Royal Ascot and Grand National meets were costly to Ladbrokes.
Shares in Ladbrokes rose as high as 146.00p upon the results being released, and were up 4.41 per cent at 137.80p at the time this article was published.
Merger With Gala Coral Proving Costly
The proposed ��2.3 billion merger of Ladbrokes and Gala Coral cost Ladbrokes ��12.1 million in the half year ending June 30, 2016 made up of ��5.6 million in corporate transaction costs, and ��6.5 million in integration planning costs.
Ladbrokes and Gala Coral received approval for their merger from the Competition and Markets Authority on the provision they dispose of between 350 and 400 betting shops in the United Kingdom. This figure is lower than the 1,000 closures initially touted in the English press as being needed to sustain a healthy competition between the newly merged company and other high street betting shops such as William Hill.
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