The cost of updating its IT systems, alongside the traditional vagaries of bookmaking during a disrupted winter for horse racing, forced a profit warning at bookmaker Ladbrokes (LAD), with operating profits for the year expected to be at the bottom end of forecasts.
At current levels, that means operating profits will come in at around £188m, according to Bloomberg data, with a substantial impact from weaker trading in the first quarter. For example, operating profits for the first three months of this year were £13m lower at £37.4m due to higher like-for-like costs of £9m, a disruption of horse-racing schedules caused by bad weather and a surprisingly weak Cheltenham Festival - the meeting this year saw a high proportion of winning favourites and all bookies felt the pinch, with Ladbrokes recording £6m lower revenues from the prestigious event.
