A radical overhaul by Jim Mullen, new chief executive at Ladbrokes (LAD), meant the first half was never going to look pretty. The former William Hill (WMH) chief operating officer announced a new strategy for the group alongside last month's proposed Gala Coral merger, so the results for the first half - including an adjusted operating loss of £37m - were not a surprise. That figure reflects nearly £79m of exceptional items generated in part by his July review. Mr Mullen had already scaled back operating profit targets for the full year by £20m and candidly acknowledged the numbers "show why we need to change and why we need to do so quickly".
The chief executive pointed to 2017 as the year he expected his plans to bear fruit, a move that "removes the short-term thinking" he said had dominated the group's prior actions. But the plan would have a short-term impact on profitability, he added.
UK retail net revenues rose 1.2 per cent to £410.5m, but adjusted operating profits dipped 1.2 per cent to £56.9m. Dissapointingly, digital registered an adjusted operating loss of £11m compared to a £6.2m profit in the same period in 2014, largely due to lower sportbook margins and the Point of Consumption tax.
Analysts at Numis expect pre-tax profits of £44.4m in the 2015 financial year, leading to EPS of 4.1p, down from £98m and 10.1p in FY14.
| LADBROKES (LAD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 109p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 109.1-109.3p | 12-MONTH HIGH: | 147p | LOW: 101p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 30p* | NET DEBT: | 136% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 589 | 27.7 | 2.6 | 4.3 |
| 2015 | 589 | -51.4 | -4.5 | 1.0 |
| % change | - | -286 | -273 | -77 |
Ex-div:24 Sep Payment:12 Nov *Includes intangible assets of £665m or 65p a share | ||||
