Ladbrokes H1 digital profits slump 72%
Bookmaker targets a return to growth in H2 2014 as online operating profit falls to £3m
Ladbrokes’ digital business recorded a 72% year-on-year fall in H1 2014 operating profit despite a rise in online sportsbook revenues and a robust performance from its mobile products.
Operating profit from online for the six months ended 30 June slumped to £3m, down from £10.8m in H1 2013, as operating costs soared 28% to £100.4m.
Total net revenue from the firm’s digital arm increased 16% year-on-year to £105m following a £6.6m contribution from Betdaq and £13.6m from its Australia-facing business.
Excluding revenue from Betdaq and Australia, net revenue fell 2.4% on a like-for-like basis to £84.8m, while Spanish-facing JV Sportium.es made a £1.2m loss, despite holding a 6% market share.
Online sportsbook revenues increased 15% year-on-year to £47.3m, up from £41m compared to the same period in 2013, after 55% growth of in-play stakes and 105% increase in mobile stakes.
The bookmaker completed the migration of its mobile sportsbook customers to its new Mobenga platform last year and Ladbrokes had previously highlighted mobile as a key part of its strategy to turnaround the company’s fortunes.
Net revenue from online gaming fell 18% year-on-year to £37.5m, with casino, poker and bingo revenues declining 14%, 60% and 13% respectively, despite Ladbrokes targeting a return to growth in H2.
Total group operating profit was down 34% year-on-year to £56.8m, while revenues increased slightly by 1.6% to £577.8m.
Despite the significant fall in operating profit Ladbrokes CEO Richard Glynn said he believes the company is now “far stronger” today as it targets a return to growth in H2 2014.
“We have made substantial progress and while there is more to do there is also much to play for,” he said. “We now have the products, the platforms, the people and the brand in place to deliver.”
Ladbrokes’ share price on the London Stock Exchange was up 4p to £1.34 at the time of writing.