Ladbrokes' revenue grows but profit takes a hit

The FTSE 100 gaming company posted its results for the year to 31 December 2015 on Tuesday.

Revenue grew from £1.16bn to £1.19bn excluding exceptional items and revenue from high rollers, which can vary significantly from year to year.

Retail revenue in the UK grew 2% while digital revenue rose 12.9%, both boosted by a strong fourth quarter.

The group’s Australia division is also growing, with net revenue from down under up 71%.

However, profit before tax dropped over 46% from £98m to £52.5m as the company invested more in its products and marketing in line with its growth strategy.

Chief executive Jim Mullen said the strategy is showing progress.

“In UK Retail, self-service betting terminals are delivering growth, football is up and our Retail team are delivering strong Multi-channel growth. In Digital in Q4, increased marketing delivered more customers and more staking with Ladbrokes.com net revenue up over 25%,” he said.

“The full year figures reflect the costs needed to undertake significant investment to deliver the strategy as well as facing circa £50 million of increased taxation.”

Mullen said while it is pleasing to report a good start after two quarters, the strategy, which was outlined in June, is still in its early stages.

“Therefore, 2016 will see the same focus on winning more recreational customers, excellent operational delivery and a performance driven approach as the basis for delivering on our clear 2017 financial targets."

Shares in Ladbrokes were up 7.1p (5.80%) to 129.5p at 0823 GMT.