Ladbrokes 2014 online profits jump 70%

Ladbrokes’ said its digital business built “momentum” in 2014 after posting a 70% rise in full-year profits and 23% increase in revenues, in its full year results announcement this morning.

Digital net revenues totalled £215.1m for the 12 months ended 31 December, up roughly £40m year-on-year, and out-going chief executive Richard Glynn described 2014 as a “pivotal year” for its online business.

Operating profits grew more sharply with Ladbrokes posting £14m in 2014 compared to just £8.2m across the previous 12 months, but that figure remains some way behind the £31.8m posted in 2012.

Online sportsbook net revenues, outside of its Australian business and Spain-facing joint-venture Sportium, grew 21% to £84.8m. The vertical was boosted by its Mobenga mobile platform launched in December 2013 as mobile stakes increased by 110%.

This rise came despite a Q4 sportsbook performance hit by what the operator described as the “worst ever football daily loss on record” on Boxing Day, causing sportsbook revenues to fall 7% during the period.

Casino net revenues fell by 1.6% to £66.4m in 2014, however, the operator was hampered by its drawn-out migration to Playtech’s full-suite of gaming products and backend IMS during the first half-year.

Following a difficult first half, H2 proved to be considerably better for casino with net gaming revenues of £35.8m, approximately 13% higher than the comparable period in 2013.

Poker showed little in the way of positive signs as net revenues fell 57% year-on-year to £1.7m, while bingo was down 13% to £5.2m.

The operator’s Australia-facing business, which launched in late 2013 and operates under the Ladbrokes Australia, Bookmaker.com.au and Betstar brands, posted a profit of £2.6m. Net revenues for the year were £34.6m.

However Ladbrokes’ other regulated businesses, which include Belgium, Denmark and Spain, posted net revenues of just £2m with an operating loss of £5.9m.

“Ladbrokes entered 2014 clear on what needed to be done to deliver a successful World Cup and to move from operational delivery in H1 to financial growth in H2,” Glynn said.

“We delivered against all our operational targets, enjoyed a successful World Cup and saw clear growth in key areas of the business. The changes put in place have made us competitive and our customers are responding,” he added.

The growth in Ladbrokes’ digital business wasn’t reflected in retail as overall group revenues grew just 3.8% to £1.2bn with operating profit down 9.3% to £125m.

Ladbrokes said digital KPIs for the year to date “remain good”. Its share price this morning was up 2.4p to 116.6p.