Analysis: Ladbrokes seeking World Cup match fitness
Ladbrokes has steadied the ship ahead of an important year, but must now defy scepticism and deliver in time for June's World Cup
Last week’s trading update from Ladbrokes, while scant on detail, sought to draw a line under what will be remembered as a thoroughly underwhelming 2013. With little of note to report, the UK bookmaker was firmly of the opinion that no news was good news.
An important message was however conveyed in the firm’s assertion that it “remains on track to deliver against its key strategic priorities during H1“, referring to Ladbrokes’ ongoing migration to Playtech software as part of a complete “reboot” of its egaming platform that started in April last year.
Delays have plagued the process and the company is now in a race against time to complete the migration before this summer’s FIFA World Cup. Failure to do so would be nothing short of disastrous considering that Ladbrokes’ main rivals remain more than a few steps ahead of them.
Ladbrokes management is all too aware of this, and eGaming Review understands that an internal broadcast to staff at Ladbrokes’ Rayners Lane headquarters by Richard Glynn last week pointed urged staff to focus on the goal of being “match fit” in time for FIFA’s flagship event this summer.
Green shoots did begin to emerge towards the end of last year. The firm successfully migrated customers to its Mobenga mobile sportsbook in mid-December, while it also made the move to Playtech’s iPoker software from the Microgaming Poker Network later that month. Both launches are understood to have taken place without issue.
What is yet to take place is Ladbrokes’ migration to Playtech’s back-end IMS software, an element which will provide the firm with all-important promotional, CRM and cross-selling capabilities that it has sorely missed until now. Without this, the firm has effectively been operating with one hand tied behind its back against far more able-bodied operators, as has been illustrated by recent results.
Held up by an ongoing software agreement between Ladbrokes and Playtech rival Microgaming, an issue which is not expected to be resolved until later in H1, the fact that Ladbrokes continues to be outperformed by its competitors has not gone unnoticed.
“Ladbrokes’ lack of marketing scale relative to competitors remains a major negative. Additionally, Ladbrokes’ CRM systems and product suite is not as advanced as competitors,” a note issued by Barclays said last week.
While Ladbrokes itself has sought to reassure shareholders the integration of this vital cog remains on target, others remain far less convinced. “We remain highly sceptical on the timing of the digital platform change and we estimate that a complete offering will not be fully up and running prior to [the final quarter of 2014],” a note issued by Investec analysts said.
Such an event could see Ladbrokes misfire during the World Cup and, more than likely as a result, fail to hit any profit forecasts set for it. Far from being match fit, anything less than the promised total reboot could see Ladbrokes limp across the line.