Ladbrokes issues digital profit warning
UK bookmaker's struggles continue online with digital profit for 2013 estimated to be between £10m and £14m
Ladbrokes has issued a profit warning for its egaming division with operating profit for its digital business predicted to be between £10m and £14m.
“Our digital earnings have been disappointing reflecting a lack of competitiveness in sportsbook, lower margins than planned and a greater disruptive impact than expected from the transition necessary to grow digital for the long term,” Richard Glynn, Ladbrokes CEO, said.
Ladbrokes agreed a long-term licensing deal with egaming software company Playtech in March this year with the aim of overhauling its online offering.
Glynn had previously stated that the company’s arrangement with Playtech was vital to the company’s hopes of returning to growth, but that an impact wasn’t to be expected until 2014.
The operator had forecast that EBIT for its digital division in 2013 would amount to £27.5m, but was forced to downgrade those estimates to between £10-14m causing the share price to fall by more than 9% at the time of writing.
In contrast online operating profit at William Hill Online is predicted to be around £160m for the 2013 finanical year.
Glynn said the firm remained focused on operational changes and said Ladbrokes was still on track to move to its new digital platform by the early part of 2014.
“We remain confident that the strong foundations we are putting in place will drive performance during 2014 and beyond,” Glynn said.
Ladbrokes chairman Peter Erskine backed Glynn to succeed saying he was “fully confident” in the management team.
“While we are disappointed that the Digital results are still not where we anticipated they would be, the board believes that the strategy is the right one and that the actions taken to date, along with those planned for the coming months, will drive the long term success of the business,” he said.