Mullen: Expect changes at Ladbrokes

Ladbrokes chief executive Jim Mullen (pictured) told eGaming Review this morning the market should expect to see “some decent changes” to strategy when he delivers his root and branch review of the business.

The review, which began when Mullen took the reins from predecessor Richard Glynn on 1 April, is now expected to be completed in June, some two months earlier than had been announced at the time of his appointment.

According to Mullen, his familiarity of the business from his time as digital director has enabled him to expedite a process he said is likely to result in two core objectives: building customer scale and combining its mobile and desktop products.

Exactly how the firm will achieve its goals is expected to be set out in June but Mullen said building a more diverse and resilient customer base would help smooth out the rollercoaster ride of sporting results which in Q1 saw sports win margin drop to just 4% and sportsbook revenues dip 32%.

More to do

“I’m not going to get into what we used to do at Ladbrokes saying it’s all going to be jam and it’s coming,” Mullen told eGR. “We do have some very strong mobile sportsbook and gaming actives and stakes uplift but we must do better.

“Of course, if results had gone our way would have produced a far stronger set of numbers but I’m not going to start harking back to results holding us back – we need to build scale.

“We need to build our recreational customer base which will give us the depth to manage any bad sporting results and that will require an approach which is different from previously so don’t be surprised when you see some decent changes,” he added.

But despite a 19% increase in actives and 29% growth in stakes, Mullen said three of the weeks in Q1 had produced Ladbrokes’ lowest sports margin in six years, which contributed to an overall 8.4% drop in digital revenues outside Australia, although the new chief exec didn’t apportion blame to its trading and risk management processes.

“I don’t think it a systemic issue as in weeks three, eight and 12 we had some of the worst margins since 2009,” Mullen said. “We continually review liability and risk management but I think it’s just a very unfortunate set of results,” he added.

Convergence

Although no figures were provided, Mullen said Ladbrokes’ customer retention rates had improved over the past six months due to continual improvements to its suite of Playtech-powered products.

This has continued of late with the operator finally releasing its version of cash-out, while Apple Watch functionality will be tested in Australia ahead of a UK launch later this year and, central its long-term plan, the launch of the Mobenga mobile platform on desktop in H2.

Mullen last week promoted director of mobile Andrew Bagguley to head up the entire digital division and said he expected to promote from within when selecting a new mobile chief to fill the current void.

And while the firm has made good progress on sportsbook he made clear he would like to see gaming provide more than the 30% of digital revenues it contributed in 2014 and said more innovation around mobile casino should be expected in the coming months.

“One of the challenges we have in this sector is that we keep talking about mobile and desktop but the customers don’t talk about that,” Mullen said. “So we need to bring mobile and desktop together and the project’s name is project Nelson.

“Nelson is essentially bringing together our desktop and mobile products so whenever you log on to Ladbrokes you’ll get a commonality of product – that in itself increases retention rates and therefore delivers yield, so there is the skeleton of our strategy.

“I think by the time we get to 2017 you’ll see north of 80% on mobile devices and at that point then I think the vocabulary around mobile and desktop will become redundant,” he added.