Ladbrokes PLC
15 November 2007
15 November 2007
TRADING UPDATE FOR THE FOUR MONTHS ENDED
31 OCTOBER 2007
Profit* for the four months ended 31 October 2007 increased by 84% reflecting
continued contribution from Telephone High Rollers, which significantly offset a
below target performance in the UK Retail business. Profit* excluding High
Rollers and the cost of our recent TV advertising campaign** decreased by 12%.
Total gross win increased by 33% including High Rollers (up 7% excluding High
Rollers).
UK Retail gross win increased by 4%:
• Machine gross win increased by 25% with average weekly gross win per
Gaming Machine*** of £586 compared to £467 for the same period in 2006. The
replacement of our Amusement With Prizes (AWP) machines is complete and there
are now 8,217 Gaming Machines deployed throughout the shop estate.
• Over The Counter (OTC) gross win declined by 5% with lower amounts
staked on horses in July and August partly due to record race cancellations in
July (23 lost meetings), before an improvement in the trend in September and
October following the commencement of winter evening opening.
• While football comparatives were tough in July due to last year's
World Cup, amounts staked on football since the start of the 2007/2008 season
were significantly higher than last year. However the margin was poor due to
unfavourable results.
• The UK Retail cost**** increase of 8.5% was lower than originally
planned, due to a continuing focus on cost control which has partially offset
the impact of winter evening opening and Amusement Machine Licence Duty (AMLD).
Ireland and Belgium Retail gross win increased by 10%.
eGaming net revenue grew by 5%. Customer sign ups grew 21% and unique active
customers grew 11% despite the impact of the World Cup in 2006. New player
numbers were boosted by an advertising campaign for Ladbrokes Bingo and customer
growth was experienced across all products. Net revenue grew in Sportsbook,
Casino and Games but this growth was partially offset by slightly weaker margins
and lower Poker net revenue in a very competitive market.
Telephone Betting net revenue was £91.8 million reflecting strong High Rollers'
activity, which has continued into November.
In Italy, 17 shops have been acquired and are now trading satisfactorily and the
Italian management team are active in the rollout of new licences. We expect our
Italian local language website to launch shortly.
In Spain, premises are being fitted out in anticipation of receiving an
operating licence in the Madrid region in the near future.
The 47th levy scheme was referred to DCMS for determination at the end of
October and the impasse with Turf TV over UK horse picture rights for 31 of the
59 tracks continues.
Ladbrokes commenced its share buyback programme on 10 August 2007 and to date
has purchased just over 8 million shares at a total cost of £33.4 million. Net
debt at 31 October was £922.8 million.
On 7 November, Ladbrokes announced the conditional disposal of Vernons for cash
consideration of £51 million, of which £45 million will be payable on
completion, with a further £3 million payable in each of the two years following
completion.
Outlook
Christopher Bell, Chief Executive, said, 'Early trading in November has seen the
continuation of High Rollers' Telephone activity and, encouragingly, reached
into double digit year on year growth in UK Retail gross win. Ladbrokes remains
focused on growing its established businesses, whilst developing the new
opportunities in Italy and Spain.'
* Profit from continuing operations, before interest and tax. This excludes
results from Vernons which have been treated as discontinued operations.
** Ladbrokes' £4.7 million TV advertising campaign commenced in October and
costs of £3.7 million have been recognised in Corporate costs in the period.
*** Since the introduction of the Gambling Act on 1 September, Ladbrokes no
longer offers the traditional Fixed Odds Betting Terminal (FOBT) and Amusements
With Prizes (AWP) products and instead runs Gaming Machines which offer both B2
content (primarily roulette) and B3 content (jackpot games), all of which offer
a maximum payout of £500. Consequently (FOBT) gross win per terminal per week
will no longer be disclosed. Gaming Machine gross win per terminal per week is
outlined below.
UK Retail 2007 2006 2005
Gross win per 4 months H1 2007 FY 2006 4 months H1 2006 FY 2006 4 months H1 2005
terminal per week £ to Oct to Oct to Oct
2007 2006 2005
FOBTs (as previously N/A 651 538 524 548 545 536 576
disclosed)
Total Gaming machines 586 572 481 467 492 487 480 513
(new disclosure)
**** Operating costs excluding gross profits tax, VAT, free bets, promotions and
bonuses
Note: The figures in this trading update are unaudited.
Enquiries
Brian Wallace Julian Arlett Ciaran O'Brien
Group Finance Director Head of Investor Relations Head of Public Relations
Ladbrokes plc
IR and PR enquiries
+44 (0) 207 355 0340
A conference call for analysts and investors will be held at 8am (GMT) today. To
participate in the conference call, dial +44 (0) 20 7162 0025 ahead of 8am and
ask for 'Ladbrokes Plc trading update'. A recording of the call will be
available until midnight, 22 November 2007 on +44 (0) 20 7031 4064 (access code
769215).
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