We are going to have to stop describing Ladbrokes as a bookie and call it a slot machines operator, as machine revenue continues to drive revenue growth.
Group net revenue in the third quarter of 2012 was up 3.9% year-on-year, with operating profit up 0.4% to £49.2m from £49.0m in the third quarter of last year.
Net revenue in the UK shops was up 5.4% on the third quarter of 2011. However, over the counter (OTC) net revenue was up just 0.6%, while machines net revenue surged 11.5% from a year earlier. The OTC gross win margin improved to 16.9% from 16.0% the year before, which offset a 4.9% reduction in the value of bets taken over the counter; the decline in amounts wagered partly reflected weather-related cancellations of race meetings, as well as the effect of the Olympics.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Digital net revenue was up 6.1% year-on-year.
The group has been lagging behind its perennial rival William Hill with its online offering and is working on a new online sportsbook which Panmure Gordon, for one, sees as key to driving growth - it thinks the new online sportsbook could boost sportsbook revenue by around 20% a year. Shareholders will be comforted, therefore, by the group's assurance that the web site development remains on plan, and the first iterations of the new online sportsbook have been successfully released. The transfer of active and new customers to the new platform is on track to complete by the end of the first quarter of 2013, as previously indicated.
Once the group has launched the new online sportsbook, the focus will switch to improving customer relations management.
"Consistent growth of both machine and OTC net revenue, as well as a robust control of costs reinforces the resilience and strong cash generation of our UK Retail business. Despite having fully annualised last year's launch of the Global Draw terminals, we remain confident that our focus on player and machine yields, as well as an increase in machine density, will generate further growth," said Richard Glynn, Chief Executive of Ladbrokes.
"Though the economic outlook remains uncertain, we remain confident in our delivery and are in line with the board's expectations for 2012," Glynn revealed.
JH
-
Skipton launches a retirement bond with monthly income – is it any good?The building society has launched a new three-year fixed-rate bond for those aged 66 and over. Can it boost your retirement income?
-
Pensions: 140,000 pensioners to be hit by surprise tax demandTens of thousands of pensioners will be written to over the summer because their pensions have gone above the frozen income tax thresholds
