Ladbrokes sells loss-making Italian retail business to Cogetech
Ladbrokes has disposed of its loss-making Italian land-based bookmaking chain to Cogetech for 5.25m, as it looks to expand into Europe via the online channel.
Ladbrokes has agreed to sell its loss-making chain of Italian betting shops to an affiliate of Italian gaming and betting business Cogetech for 5.25m.
The cash sale price represents an 83% discount on the business’ quoted carrying value of £26.7m (30.3m), as of 31 December 2009. Cogetech will assume responsibility for approximately 18m of guarantees currently provided by Ladbrokes.
The sale follows Ladbrokes’ appointment last month of Richard Glynn from pure online business Sporting Index to the post of chief executive, as it focuses on generating increased growth from its online division.
Cogetech has acquired Ladbrokes’ entire Italian retail estate of 82 shops and 51 corners and its head office in Milan. The British bookmaker’s Italian retail business posted a loss of £9.9m during 2009.
Ladbrokes announced its exit from the Italian retail market at the time of its first-half results in August 2009, blaming lower-than-expected revenue growth, the continued presence of illegal shops, increased competition and the high level of further investment required to achieve critical mass.
Ladbrokes’ exit from the land-based retail market in Italy coincides with the bookmaker expanding its online operations in the country, recently launching as the first room on Microgaming’s Italian poker network. The bookmaker stated its intention last December to also offer bingo and casino into the Italian market during 2010 as regulation allows.
The bookmaker also last week announced a joint venture with French TV giant Canal+ to launch in France once the country’s egaming market opens to private operators this summer.
Ladbrokes’ withdrawal from the Italian land-based market follows that of rival William Hill in 2008, which sold its JV with Spanish gaming group Codere to Intralot for 5.5m. Ladbrokes retains its land-based Spanish JV with Cirsa, which former chief executive Chris Bell said last year he expected to break even during 2010. Bell however added that its continuance would depend on regulation allowing it to expand into regions outside of Madrid in order to generate the required scale.