In one of the first financial reports under CEO Jim Mullen’s leadership, Ladbrokes posted strong revenue growth across all metrics – but improving profits from a loss-making digital division remains a high priority.
[dropcap]L[/dropcap]adbrokes’ revenues swelled to £661.8m in the first six months of 2016, marking annual growth of 13.6 percent.
In one of the first major financial reports since Jim Mullen was appointed CEO, Ladbrokes revealed that group operating profit had grown by 34.4 percent to £52.3m, while after-tax profits had soared by 57.2 percent to £34.9m.
“These strong numbers show customers are responding positively to the new strategy at a time when the sporting gods have generally been on our side and we’ve enjoyed some helpful bookmaker friendly results,” said Mullen.
“This combination has helped boost profits in the first half of the year.”
Favourable sports results were a major factor in the better-than-expected operating profit, which included a healthy £63.5m headline profit from Ladbrokes’ sizeable UK retail division.
Ladbrokes.com – a core part of the company’s multi-channel strategy – saw revenues climb by 45.5 percent, while digital revenues as a whole grew by 40.9 percent to £158.1m.
Our products have evolved to reflect changing customer demands and align the Ladbrokes experience to their own expectations. The response has been positive.
But despite improvements in staking and the number of active customers, online and digital continue to make a loss for the business.
“In Ladbrokes.com, we have increased our marketing spend and the improvements to our products in H1 have been driven by a customer-focus rather than a technology-focus,” added Mullen.
“Our products have evolved to reflect changing customer demands and align the Ladbrokes experience to their own expectations. The response has been positive.”
At the end of July, Ladbrokes was given the go-ahead for its merger with Coral on the condition that the bookmakers sold 350-400 shops from their combined estate.
Describing the announcement as a “significant step forward,” Ladbrokes said it remained confident that it would be able to complete the sales by the end of the third quarter.
“Encouragingly we have delivered a good performance across all the key customer metrics outlined in last year’s strategic plan and that gives us confidence that we are well placed to deliver against our stated 2017 targets,” said Mullen.
“We have grown recreational customers, increased our football business, attracted more multi-channel customers and grown strongly in Australia. However, we are taking nothing for granted.”