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Ladbrokes Posts 9 Percent Fall in Profits

Written by:
Reuters
Published on:
Feb/26/2015
Ladbrokes Posts 9 Percent Fall in Profits

(Reuters) – Ladbrokes (LAD.L), Britain’s second biggest bookmaker, said it intended to maintain its dividend in 2015, defying some analysts' expectations of a cut to help fund marketing costs, as it posted a 9 percent fall in annual profit.

The firm has struggled to keep pace with rivals such as William Hill (WMH.L) and establish itself in a growing online sector, with investment in marketing and product lagging others.

In December Ladbrokes kicked off a search to replace current chief executive Richard Glynn to lead a greater push online, with analysts expecting a further restructuring and a clearer strategy to follow. 

A dividend cut will not happen this year, however, with the firm saying on Thursday it intended to maintain an 8.9 pence dividend per share for 2015.

The company, a familiar sight in Britain's town centres with over 2,000 retail outlets, said operating profit fell to 125.4 million pounds ($195 million) for 2014, slightly below a company compiled consensus forecast of 128.8 million pounds.

Profits from its UK retail business, its largest division, fell 11 percent, hurt in particular by weak industry-wide football results in January and December, but rose 71 percent at its digital division.

Ladbrokes closed 89 loss or near loss making shops in 2014 and said on Thursday the impending rise in Machine Gaming Duty and new UK regulations meant more closures would be inevitable, with 60 slated for 2015.

"Whilst recognising there are regulatory headwinds, Ladbrokes is confident in its plans for 2015," Glynn said.

Shares in the company closed at 114.2 pence on Wednesday, down 26 percent on a year ago, valuing the firm at 1 billion pounds.

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