American playwright Wilson Mizner said gambling was "a sure way of getting nothing from something". That may be true of the punter but not the house, as Ladbrokes' (LAD) latest numbers suggest. Chief executive Jim Mullen said customer staking held firm despite a fair run of results going the company's way. But he's not a man to bet on continuous luck, and warned there would inevitably be a run of more customer-friendly results at some point. When that happens, gross win margins would normalise from the 17.4 per cent hit this term.
Most importantly, the group reported a half-year profit compared with a loss this time last year. This was spurred by the digital division, which saw sales rise 41 per cent to £158m and turnover growth of 6.4 per cent to £437m across its UK retail estate. A key part of the latter's performance has been the implementation of its planned BetStation strategy, which allows customers to place their own bets in store. This now makes up 10 per cent of over-the-counter flutters.
Australia, a key growth market for the company, saw active customer numbers increase by more than 71 per cent - impressive given Ladbrokes is growing that business organically rather than through acquisitions.
Analysts at Stifel expect pre-tax profit of £73m for the year to December 2016, leading to EPS of 6.1p compared with £52.5m and 5.4p in 2015.
| LADBROKES (LAD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 141p | MARKET VALUE: | £1.44bn | |
| TOUCH: | 141-141.2p | 12-MONTH HIGH: | 146p | LOW: 93p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 47p* | NET DEBT: | 47% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 589 | -51 | -4.5 | 1.0 |
| 2016 | 662 | 25 | 2.0 | 1.0 |
| % change | +12 | - | - | - |
Ex-div: 22 Sep Payment: 10 Nov *Includes intangible assets of £683m, or 67p a share | ||||
