Ladbrokes (LAD) was taken to the cleaners by football punters on Boxing Day, as every short-priced team in the Premiership held sway. The resultant £8m outflow put a serious dent in the group's full-year operating profits, which fell 29 per cent to £66.2m. According to outgoing chief executive Richard Glynn, it was the bookie's "worst ever football loss", and it may have hastened management's decision to close another 60 betting shops.
Anyone can have a bad day at the races, but Ladbrokes' prospects have taken a beating as light-touch regulation of the betting industry has given way to a more heavy-handed approach. Earnings will be squeezed by a March increase in machine gaming duty from 20 per cent to 25 per cent, in addition to the recent introduction of a 'point of consumption' tax. New regulations governing the maximum stake on gaming machines are also being introduced.
The last point is significant, given the accelerated rollout of automated betting platforms across the Ladbrokes estate. The group introduced 9,000 new Clarity gaming machines in time for last year's World Cup, which was a factor in the improved showing from Ladbrokes in the second half.
Goodbody Stockbrokers expects EPS of 9.4p, along with revenues of £1.22bn for 2015.
LADBROKES (LAD) | ||||
---|---|---|---|---|
ORD PRICE: | 119p | MARKET VALUE: | £1.1bn | |
TOUCH: | 119-120p | 12M HIGH / LOW: | 167p | 102p |
DIVIDEND YIELD: | 7.5% | PE RATIO: | 27 | |
NET ASSET VALUE: | 42p* | NET DEBT: | 107% |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2010 | 1.0 | 147.0 | 41.5 | 7.6 |
2011 | 1.0 | 135.0 | 13.0 | 7.8 |
2012 | 1.1 | 200.0 | 21.0 | 8.9 |
2013 | 1.1 | 67.6 | 7.3 | 8.9 |
2014 | 1.2 | 37.7 | 4.4 | 8.9 |
% change | +5 | -44 | -40 | - |
Ex-div: 26 Mar Payment: 14 May *Includes intangible assets of £742m, or 80p a share. |