Ladbrokes defiant amid fresh profit speculation
Operator slams market speculation sparked by broker note as "extremely premature"
Ladbrokes has denied rumours suggesting another profit warning could be imminent, labelling the speculation as “extremely premature”.
Speculation mounted yesterday after Ireland-based brokerage firm Goodbody Stockbrokers sent an email to clients warning that the bookmaker’s full-year operating profits forecasts were to be cut from £145m to £135m.
That revision, the note suggested, was owing to lower profits from telephone betting, underperformance in its UK retail business, further shortfalls in Ireland and Europe and losses in Australia, a market which the company entered in September. Ladbrokes shares crashed on the speculation and reached a low of 178.5p, having started the week as high as 194p.
The company responded instantly, noting that its current group performance expectation remained with analyst’s EBIT forecasts.
“With a key part of the sporting calendar ahead it is extremely premature to speculate on the outturn for the year,” the statement read.
Analysts have however remained sceptical of Ladbrokes’ assurances, with Numis pushing its 2013 EBIT forecast from middle of range to below range.
Investec Analyst James Hollins said it was an “odd decision” to make a statement considering that sporting results are “unequivocally volatile”.
“Market speculation on sporting results should not require a statement,” he added.
Ladbrokes has endured a turbulent 2013 and was forced to issue its third profit warning of the year in September, indicating that profit from its digital business was now expected to fall between £10 and £14m as the company underestimated disruption caused by its software migration deal with Playtech.