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Ladbrokes, one of the UK’s largest bookmakers, saw its shares fall almost 12 per cent after issuing a profit warning due to declining revenues in its online business.
From Christopher Thompson of the Financial Times:
The bookies said consensus full-year earnings before interest and tax (ebit) profits were expected to be £205m – £10m lower than analysts’ previous projections.
Weak margins in online sports betting and technological problems meant lower-than-expected online revenues, the company said.
Ladbrokes said first-half earnings from its digital business were expected to be about £15.5m, or half the amount in the first half of 2011 – only up 6 per cent on the previous year.
Analyst Nick Batram of Peel Hunt advised the Times that Ladbrokes reputation has taken a hit in recent months.
“There was always a risk that there would be some delay in the digital turnaround and poor sports results have simply given greater exposure to the issues,” he said.
The turnaround strategy outlined by Ladbrokes CEO Richard Glynn late last year has not been especially effective.
- Aaron Goldstein, Gambling911.com
