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Ladbrokes Suffers Rough First Half

UK based retail and online betting giant Ladbrokes has has released its first half 2014 financial results, noting a 72% collapse in digital betting profits.

The staggering numbers are big, but only contributed only 4.4% of Ladbrokes' profits, which is in contrast to many other major UK betting firms who see about half of their profits coming online.

Company highlights for the half were:

Mobile Sportsbook growth: staking +105 percent; active players up 74 percent y-o-y;

  • Playtech migration completed;

  • Successful roll out of c.9,000 Clarity machine cabinets ahead of World Cup

  • SSBT estate grown to 1,750 supporting UK Retail focus on football

  • International diversification progressing with Australia's Betstar acquisition;

  • Good World Cup performance with stakes up 20 percent;

  • Group stakes GBP115.3 million up 22.4 percent; gross win margin 24.3 percent;

  • Digital net revenue up 25.9 percent; sign ups increased 48 percent; active player climbed 28 percent;

  • Mobile staking growth up over 1100 percent; 63 percent from sportsbook wagering;

  • UK Retail wagering up 7.9 percent; gross win margin 27.4 percent;

  • Spain Retail JV wagering up 160 percent; Belgium Retail staking up 157 percent;

Financial performance for the half was:

  • Group net revenue up 1.6 percent;

  • Group operating profit down 33.7 percent at GBP 56.8 million;

  • Underlying earnings per share down 38.6 percent to 4.3p, but half-year dividend maintained;

  • High rollers contribution to operating profit up at GBP 10.7 million (H1-2013: GBP 3.4 million).

Commenting on his company's performance Ladbrokes CEO Richard Glynn said, “In the first half of 2014 we successfully delivered all of the planned operational improvements in time for the World Cup. Our offer performed well, delivering a great betting experience for our customers and a good result for the business in a highly competitive market."

"We have made substantial progress and while there is more to do there is also much to play for. We now have the products, the platforms, the people and the brand in place to deliver. Ladbrokes today is a far stronger company and well positioned for growth.”

Commenting on his firm's drop in digital performance Glynn added, "It's a change in pattern. The 18-to-34 year old male comes into the shops for the social experience and uses mobile to play," he told The Guardian newspaper.

Betting on mobile more than doubled in the first half, with Glynn opining: "Mobile is the battleground now... there is no doubt about it. We only launched our mobile product six months ago, it is now bigger than desktop in digital."

"We said a few years ago that Ladbrokes needed to dramatically increase its presence in the digital and mobile world. I think I've been very upfront about the fact that it's taken us a while to do that. The road has been bumpy at times. The product didn't match the brand."

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