Ladbrokes revenue grows for fourth successive quarter

FTSE 250 betting and gambling company Ladbrokes reported growth for a fourth successive quarter for revenue as it remains confident of delivering full year results in line with expectations.

In a trading update for the third quarter ended 30 September, net revenue increased 12.1%, compared to the same quarter last year.

UK retail revenue increased 1.9% as higher over-the-counter margins had normalised in the third quarter as OTC staking was down 4.3% or 3.9% on a like-for-like basis, in football growth rose 17.3%.

Digital revenue rose 48.2% and revenue from Ladbrokes.com plus exchanges climbed 32.7% with revenue from sportsbook and gaming rising 47.9% and 23.7% respectively.

Revenue from Australia increased 89.6% and European retail revenue rose 11.3%.

Chief executive Jim Mullen said: "Our margin has been resilient, benefitting from our strategy of focusing on the recreational customer, deploying BetStation across the estate and growing in football. This margin has been in spite of loss-making racing festivals at Goodwood and York; I said at our half year results in August that sporting results would turn against us and in racing they promptly did.

“However, we did enjoy a strong end to the Euros and a stuttering start to the season for Manchester United and Barcelona has been in our favour. With the Melbourne Cup, an action-packed Boxing Day, the return of the National Hunt season and an intense programme of top level football to come, there remain significant opportunities and risks ahead.”

The company is currently working towards its merger with rival Coral as it has agreed to sell 359 shops subject to approval from the Competition and Markets Authority.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Ladbrokes is scoring everywhere that rival William Hill is not, with “robust” growth online and success in Australia since gaming giant Playtech switched from William Hill to Ladbrokes.

“There’s good news on the high street too. After more than a year of wrangling, the last major hurdle to the merger with Coral seems to have been cleared. True, the sale of the required 350+ shops came at a lower price than we had hoped – but realising the efficiencies from the deal should more than make up or that.

“Our one concern is around increased regulation, particularly of fixed odds betting terminals. Gambling machine revenues were key to the positive UK high street performance today but the machines – often described as the crack cocaine of gambling – are unpopular with politicians and the media. With the government’s regular triennial review of stakes and prizes due to start soon, more regulation could be on the way. Increased exposure to the high street following the Coral merger would make a clamp down even more painful.”

Shares in Ladbrokes were up 3.19% to 142.30p at 0901 BST.