Ladbrokes tipped to post fall in half-year profits

Gaming machines face slowdown. Picture: Contributed
Gaming machines face slowdown. Picture: Contributed
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BOOKMAKER Ladbrokes is tipped to post a sharp fall in half-year profits on Thursday, in sharp contrast to rival William Hill’s impressive interim results last week.

Booming demand for online and mobile betting helped William Hill post a 4 per cent rise in underlying profits to £156.2 million, while net revenues rose by a fifth to £751.6m.

However, Ladbrokes has suffered a difficult year so far after it warned in April that full-year operating profits would be at the bottom end of market forecasts.

The bookmaker blamed the lower revenues on the success of high-value gaming customers and a big number of horse racing fixtures losing to the weather in the first three months of the year.

Profits were down £13m to £37.4m in the three months to 31 March and half-year figures are set to show a further slide.

Shore Capital is predicting an £18m fall in interim profits to £72m, hit by a new 20 per cent machine gaming tax this year as well as a slowdown in gaming machine revenues.

Gaming machines have been a big driver of growth in the industry but Ladbrokes has warned it expects rates to slow as the market becomes more competitive. With around 8,500 machines in the UK estate, gross win per machine for the first quarter was £916 a week, down from £923 a year earlier.

Shore Capital analysts said: “We expect management to provide an update on how it intends to stimulate both machine growth and over-the-counter volumes.”

Ladbrokes, which is led by chief executive Richard Glynn and has more than 2,700 betting shops, is investing in its online and mobile offering to tap into the surging demand among punters.

The company launched a partnership earlier this year with gaming software firm Playtech, which has already played a big role in the digital growth of William Hill. Ladbrokes will launch online “Las Vegas” games later this year.