Last year was a disaster for gambling outfit Ladbrokes (LAD). Disruption to its digital platform, a new machine-games duty, higher costs and lower footfall sent operating profit plummeting 33 per cent to £138m. Digital profits dropped 74 per cent to £8.2m and UK profits fell 26 per cent to £134m.
However, finance director Ian Bull insisted the results mask “significant" progress. One crucial element of this is a long-term partnership with Playtech (PTEC) to provide a better digital platform, a mobile service, new stores and the acquisition of Australian business Betdaq.
The benefits of the restructuring, which resulted in £51.6m of exceptional costs, won’t be felt until the second half of 2014, but Mr Bull said he was confident the changes would be in place by the World Cup. That includes the transition to Playtech, which should offer customers a more efficient and accessible digital service, and the roll-out of 9,000 new gaming machines.
However, 2014 will also see the introduction of a so-called 'place of consumption' tax, which will drain £2m from the digital business, while the World Cup will require a higher marketing spend. Peel Hunt expects pre-tax profit and EPS to rise by about 9 per cent in 2014 to £123m and 11.8p respectively.
| LADBROKES (LAD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 157p | MARKET VALUE: | £ 1.4bn | |
| TOUCH: | 156-157p | 12-MONTH HIGH: | 245p | LOW: 144p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 46p* | NET DEBT: | 93% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.03 | 174 | 19.5 | 2.98 |
| 2010 | 0.98 | 147 | 41.5 | 7.60 |
| 2011 | 0.98 | 135 | 13.0 | 7.80 |
| 2012 | 1.08 | 201 | 21.0 | 8.90 |
| 2013 | 1.12 | 68 | 7.30 | 8.90 |
| % change | +4 | -66 | -65 | - |
Ex-div: 26 Mar Payment: 15 May *Includes intangible assets of £771m or 84p a share | ||||
