Ladbrokes profits slump despite mobile growth
Digital operating profit falls 28% with all verticals bar sports showing decline
Ladbrokes digital operating profit fell 28% year-on-year in the first half of the year as the Gibraltar-licenced operator’s digital woes continue while it waits to complete the Playtech integration.
Digital operating profit for the six months to June 30 dropped to £10.8m, with all verticals except sports showing decline and casino, poker and bingo falling 6.8%, 25% and 15.5% respectively.
Growth in the company’s sportsbook amounted to 9.9% with net revenue rising to £41m, however the increase was led by favourable sports results, particularly in football during Q1 causing a 2.3% increase in gross win margin.
Ladbrokes CEO Richard Glynn stated Ladbrokes deal with Playtech was vital to the company’s hopes of returning to growth, but added it wasn’t expected to make an impact on results until next year.
“We aim to finalise the integration early in 2014, thereby enabling significant growth in earnings,” he added.
The firm has launched its Ladbrokes Israel office to focus on restoring growth to the digital division and already has 60 staff in the new office with a headcount of 100 expected by the end of the year.
Mobile showed strong growth with sportsbook net revenue on mobile rising by 40.8% during H1, amounting to 29% of total sportsbook stakes.
Ladbrokes also announced the re-launch of its mobile offering on the Mobenga platform with the first phase going live last week and the migration of all existing customers expected to completed in 2014.
The firm also launched roulette, blackjack and bingo apps during H1 with a new football coupon app and football singles app, ‘Kammy’s Kick Off’ set to be released during H2.
Casino and games revenue fell 6.8% to £35.7m, and Ladbrokes’ focus is now on improving player acquisition and retention following the launch of the Playtech-designed ‘Vegas’ tab.
The company incurred exceptional costs of £21.8m during H1, £15.6m of which attributable to the on-going integration with Playtech
Ladbrokes cited strong competition as a reason for a 25% decline in online poker revenue during the period, although it added the company’s migration to Playtech’s iPoker network should help it gain a more competitive position.
Ladbrokes also expects Playtech to help improve its bingo product with the launch of a new website as net revenue for the vertical fell 15.5% year-on-year to £6m.
Betdaq, acquired by Ladbrokes in January this year, contributed £3.9m to total net revenue for the period, without which the figure would have represented a 1.6% reduction to £86.9m.