Ladbrokes upgrades Coral deal synergies, posts small rise in H1 revenue

FTSE 250 bookmaker Ladbrokes said on Thursday that group revenue nudged higher in the first half as it announced that synergies from the Coral Group deal would be bigger than initially estimated.

In a pre-close trading update for 1 January to 30 June, the company said it has upgraded its synergies to £150m per annum by 2019 from £100m, mostly driven by further cost savings identified through procurement, IT and the harmonising of horse racing gross win margins across the UK retail brands.

Total group net revenue in the period was 1% ahead of last year, with revenue in digital 17% higher, which the company said was particularly pleasing against a backdrop of a significant period of platform integration and a competitive trading environment.

UK net revenue was down 6% compared to last year, while European retail net revenue fell 1% from last year.

Chief executive officer Jim Mullen said: "In UK Retail, a key management focus has been on addressing some areas of ongoing inflationary pressure on the cost base and on improving gross win margins. Examples include the planned and considered commercial decisions taken on horse racing media costs and horse racing gross win margin.

"Whilst these have had a negative impact on stakes, they have been profit positive and helped mitigate some of the impact of underlying run rates. Furthermore, we are pleased to have resumed showing pictures from all UK racecourses following the agreement of a profit-share deal with The Racing Partnership reported last week."

George Salmon, equity analyst at Hargreaves Lansdown, said: "While the extra synergies from the Ladbrokes-Coral merger unveiled in this update are welcome, one gets the feeling the £50m per annum bump could well pale into insignificance once the government has had its say on the future of controversial fixed odds gambling machines."

At 1112 BST, the shares were up 3.7% to 123.87p.