Strong quarter for Ladbrokes

One of the UK’s oldest and largest retail bookmakers has warned of potential shop closures and job losses in 2015, because of regulatory uncertainty and a 5% hike in Machine Games Duty (MGD).

Speaking as Ladbrokes released its Q1 Interim Management Statement, Chief Executive Richard Glynn, said: “The unexpected recent tax increases and ongoing uncertainty surrounding regulation are unwelcome. We continue to advocate an evidence based debate and to demonstrate our commitment to

social responsibility. The significant economic impact of excessive regulation on the business and in terms of jobs, is clear. However, we are heartened by the strong support we have received from customers who continue to enjoy using our products, with one million people recently signing an industry petition in support of their local betting shop.”

The report stated that the increase in duty from 20 to 25% from March next, is equivalent to a full year impact of approximately £19.5 million, and said the company will review additional unit closures for 2015, while trying to soften the blow through cost savings and staff redeployment. The firm’s closure target for this year is approximately 50 stores, 24 of which have already shut their doors.

Despite these challenges, the business reported a strong Grand National sportsbook and mobile digital performance, a Cheltenham to remember, and the takeover of Australian bookmaker Betstar, as operational achievements. Mobile actives and stakes recorded substantial growth, up 32 and 95% respectively.

The roll out of self service betting terminals has been successful, driving approximately 75% of amounts staked in football activity, as the operator gears up for Brazil in two months’ time, and its forthcoming retail launch in Catalunya.

“In Q1 we delivered all of our stated operational targets on track or ahead of plan and our financial performance remains consistent with our expectations at the time of our annual results announcement in February.

“Retail competed well demonstrating its continued appeal to the customer. In particular, it was pleasing to see OTC staking grow, driven by a strong performance in football. In Digital, the early encouraging customer response to our more competitive mobile and sportsbook offer has continued and our Grand National performance, particularly on mobile, shows that our product and platform improvements are starting to gain traction,” said Glynn.

Ladbrokes has also installed 61% or 5,500 of its 9,000 new ‘Clarity’ machines, in partnership with SG Gaming, meaning it is on target for June’s festival of football, the report reveals.

“Looking ahead, the build up to the World Cup will see heightened competition. We are now in position to compete hard, targeting customers through our brand and improved products along with aggressive but sensible offers and promotions. In Digital, with the move to IMS and single wallet capability, we now have in place all of the operational infrastructure from which to drive growth in H2 and beyond,” added the chief executive.