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Tuesday August 28th 2012

News in Flashback

Ladbrokes’ Bonunce Back in Quarterly Profits

Ladbrokes Plc, the UK BOOKMAKER reported a bounce-back in quarterly profits yesterday after it benefited from a stronger start to the English football season.

Operating profits rose from last year’s £22.4m to £51.1m in the three months to September 30, following a 15% improvement in the amount of money left by losing UK shop customers over the period.

Last year’s trading performance was impacted by a winning start to the football season by Chelsea and Manchester United and the low incidence of draws – the bookies’ favourite result.

With Ladbrokes also benefiting from a profitable end to the World Cup and a stronger performance from its gaming machines, the company said its UK shop revenues for the three-month period surged by 128%, reflecting 12% growth in revenues.

This was despite a 5% decline in the amount of money staked by customers in the company’s estate of more than 2,000 shops.

In Ireland, the country’s economic difficulties were blamed for a 9% decline in the amount of money staked by over-the-counter customers.

Overall, chief executive Richard Glynn said the third quarter trading performance had boosted expectations that Ladbrokes will meet its targets for the full year.

He added: “Ladbrokes has a great brand and a strengthened management team determined to drive operational improvements going forward.”

Shares opened more than 4% higher following the update.

Ladbrokes’ new chief executive joined in April from betting firm Sporting Index with a £12m incentive to double the group’s share price. He is carrying out a review of the business and will look at areas including technology, internet performance and brand effectiveness. More details of the review are expected in February.

Numis Securities analyst Ivor Jones said: “We remain optimistic that there is scope to make Ladbrokes a better business for the eventual cyclical recovery.”

He said Ladbrokes was benefiting from a period of easier comparatives which have helped to make the headline numbers look better than the underlying reality.

In e-gaming, Ladbrokes said revenues were up 17% during the third quarter with growth in the sportsbook, casino and bingo partially offset by weakness in poker and games.

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