Multi-channel offering drives Ladbrokes Coral digital growth
H1 digital revenues up 14% with sportsbook and gaming both up double digits
Ladbrokes Coral this morning reported a 14%cc rise in H1 digital revenues to £374.5m, with the group hailing its multi-channel offer in the UK and “market-leading” growth in Australia.
Sportsbook net revenue increased 18%cc year-on-year, or 27% when accounting for Euro 2016, with Australia in particular recording strong growth after stakes grew 46%cc.
In the UK, sportsbook stakes excluding the Euros were 10% up, which the firm said was due in part to the acquisition of customers with a higher predicted ROI at the expense of higher-staking but less profitable customers.
Multi-channel remained a key component of digital growth with 53% of Coral.co.uk net revenue and 36% of Ladbrokes.com net revenue being contributed by multi-channel customers. In Italy, 37% of Eurobet.it actives were initially acquired in the Eurobet Retail estate.
Digital gaming revenues were up 10%cc, led by the sportsbook brands which grew 15%cc thanks to increased cross-sell from sports and new product releases.
The group said gaming net revenue accelerated in the second half of Q2 as Galabingo.com recovered from a softer first quarter when several progressive jackpot payouts landed.
Marketing costs of £100.2m were 11% higher than last year although formed a lower percentage of net revenue at 26.8%, down 1.3pp from last year. A relative reduction in affiliate and sponsorship spend was partly offset by an increase in TV advertising spend.
Digital EBITDA climbed 39%cc to £73.7m.
“Ladbrokes Coral continues to make good operational and financial progress,” group CEO Jim Mullen said.
“We entered the year with ambitious targets for the first half to substantially complete the integration of our teams and migrate UK Digital to a single platform. We delivered on both fronts and at the same time kept the business moving forward.
“It is pleasing to report strong Digital growth, ongoing momentum in Australia, and in spite of adverse sporting results, market share gains in Italy.
“The business is now looking to the second half with confidence. The sensible and sustainable agreement on [horseracing] picture rights will underpin an improvement in retail footfall. Following the Digital platform migration, the product pipeline is flowing again with some exciting enhancements arriving in time for the new football season.
“A new model aimed at optimising our online customer acquisition marketing mix is already driving improved effectiveness, supporting enhanced returns on investment through a focus on higher value customers. Finally, the synergies from our recent merger step-up substantially in the second half to deliver a full year saving of £45m.
“The business is in good shape and we have come a long way in a short time. The increase in the dividend reflects both the progress made, the opportunities offered by the merger and our confidence in the future,” Mullen concluded.