Dividend cut as Ladbrokes joins list of battered bookies

Published on Thursday 6 August 2009 21:28

A RUN of poor figures for the UK's bookmakers continued yesterday when Ladbrokes reported a fall in profits and cut its dividend.

The company, which has more than 2,000 betting shops in the UK, said cancellations and poor margins in horse-racing and a first-ever loss-making month on football added to pressure caused by recession.

Pre-tax profits for the six months to 30 June fell 3.9 per cent to 131.3 million, though this widened to a 25.6 per cent drop to 98.6m when excluding one-off items and gambling by high-spending customers.

Ladbrokes said the uncertain outlook forced it to reduce its interim dividend by 31 per cent to 3.5p a share. Unlike rival William Hill earlier this week, which warned that full-year profits from its UK shops will be lower than forecast, the company stuck by profit expectations for the year.

Chief executive Christopher Bell said: "The economic and trading environment remains challenging, and continuing uncertainty makes forecasting difficult."

He said the company still expected to meet forecasts, because annual costs should increase by 1 per cent, rather than the 4 per cent previously thought.

Ladbrokes has implemented a new staff rota and bought out premium pay for Sunday and bank holiday working, in a move expected to deliver 12m a year in cost savings.

In the UK retail business, Ladbrokes said revenues fell 7.4 per cent to 343.6m, while profits fell 16.5 per cent to 82.1m. The absence of a major football tournament and horse-racing cancellations at the start of the year were blamed, though the amount staked by punters, excluding these factors, still fell by 4.6 per cent.

The company was also hit by a difficult May after the success of the top four English Premier League football teams at the end of the season.