BOOKMAKER Ladbrokes yesterday blamed hot weather for hitting footfall in its shops and for an increase in the percentage of favourites winning horse races.
As well as a slump in the slot machine market and fewer football punters, Ladbrokes said the hot weather had led to harder ground at race courses, which saw horses being withdrawn and resulted in a higher percentage of winning favourites.
In marked contrast to figures from rival William Hill last week, the firm said half-year profits had dived almost 50 per cent and trading had failed to improve since June, with July footfall 15 per cent lower as soaring temperatures kept customers away from its shops.
Ladbrokes also saw a significant reduction in its gross winnings from this year’s Cheltenham horse racing festival, which was largely offset by a strong Grand National meeting and a positive year-on-year performance at Royal Ascot.
The group is the latest company to blame the hot weather for bruising its finances after bakery chain Greggs revealed earlier this week that it was left nursing a £2 million hit from slumping pasty and cold drinks sales. Ladbrokes said that the gaming machines market has slowed more than feared, with intense competition adding to the woes, almost halving pre-tax profits for the first six months of the year to £55.1m from £106m.
Group revenues were up 6.4 per cent to £563m as its store network expanded and digital revenues edged up.
Chief executive Richard Glynn said good progress on its strategy was “disappointingly not reflected in our first-half financial performance”.
Gaming machine revenues have been a big driver of growth in the industry, but Ladbrokes has seen rates slow as the market becomes more competitive.
The market has also been hit by a new 20 per cent machine gaming duty this year.
Trading deteriorated further in July, with gross win per shop slumping 9.2 per cent and group revenues falling 12 per cent, and the group has given up on growing like-for-like sales from machines this year.
Its UK retail arm saw operating profits slump 20 per cent to £73.2m, but more race meetings in the second quarter helped to offset weather cancellations in the opening three months of the year.
Ladbrokes’ digital arm saw profits dive 28 per cent to £10.8m as costs rose and takings from online poker, casino and bingo fell.
However, it believes digital profits are poised to boom after recently striking a software deal with Playtech, which will see it roll out games and technology for online and mobile customers.
Simon Davies, an analyst at Canaccord Genuity, said that, although the figures were weak, they were in line with the broker’s expectations.
He said he continued to see “some significant easy wins” for Labrokes’ online business from next year including a major upgrade in its mobile offering and improving online marketing.
Shares in Ladbrokes closed down 8.1p, or 3.9 per cent, at 199.6p, while William Hill dipped 3.2p to 446.6p.