Jim Mullen: Ladbrokes is winning back its pride
Chief exec says firm is ahead of target as it ramps-up its marketing and multi-channel strategy
Ladbrokes is “winning back its pride and belief” following a tough few years, the company’s CEO Jim Mullen (pictured) declared today after announcing a 41% increase in H1 digital revenues.
The chief executive was buoyed by the improvement in Ladbrokes’ digital business which delivered growth across the board, notably a 69% revenue increase in the Ladbrokes.com sportsbook and a 30% rise in staking, despite sporting results going disproportionality the way of the bookie during the six-month period.
Speaking to analysts this morning, Mullen reiterated the company wasn’t interested in a “quick fix” and was instead putting the foundations in place for sustainable growth, primarily through an aggressive marketing strategy and multi-channel focus.
The firm ramped up marketing spend to 35% of net gaming revenues, with Euro 2016 a particular target, all of which resulted in an additional outlay of £18.4m.
This increased investment meant Ladbrokes posted an operating loss of £9.4m but the firm’s CFO Richard Snow said it would continue to prioritise marketing for recreational growth ahead of short-term profitability.
Snow also revealed Ladbrokes’ recently acquired punters â sportsbook actives were up 42% in Q2 – were proving to be more profitable than longer-term customers, with the uptick in value more than compensating for higher CPAs. “This shows we aren’t overheating our marketing spend,” he said.
According to Mullen, over the past three years Ladbrokes has developed a “competitive, if not better than the market” digital product and his job now was to put that in front of as many people as possible.
And part of that product overhaul comes in the form of multi-channel, which Ladbrokes said had delivered more than 100,000 new customers sign-ups since its launch back in August 2015.
Mullen said Ladbrokes was “the leading example of how retail and digital can work together” and described the operator’s retail division as “the best affiliate tool we have” for driving customers to its digital products.
The chief exec also looked forward to the merger with Gala Coral, which should complete in the autumn, and praised its merger partner’s multi-channel prowess, which when combined with Ladbrokes would give the combined firm an even stronger platform for growth.
One of the few areas Ladbrokes failed to achieve growth was its Betdaq exchange business, which saw revenues fall from £6.8m last year to £6.4m, despite this summer providing both the Euro 2016 and Copa America competitions.
However, Mullen swatted away any suggestion the firm may look to dispose of the business.
“No, we don’t think we should be selling it [Betdaq],” Mullen said. “It has some loyal customers and also, with some of the volumes which go through during big meetings, gives us some intelligence so adds value to our wider portfolio.”
Ladbrokes also reported an exceptional cost of £14.5m, which the firm said was largely related to the imminent merger with Gala Coral.