Bookmaker Ladbrokes achieved better-than-projected earnings during the 1st half of the financial year mainly because of positive sports results and wagers with a 13.1 percent annual rise in income to £661.8 million while pre-tax profit increased 61.1 percent year-on-year to £39.8 million.
Chief executive officer Jim Mullen of the Financial Times Stock Exchange (FTSE) 250 Index company said the figures indicate an upbeat response from customers to the updated strategy employed by the company. It also shows the decision to intensify marketing initiatives and expanding multi-channel gaming across various avenues is producing good results.
Ladbrokes is planning a merger with its main competitor, Coral and predicts a string of customer friendly outcomes within the near future. Management disclosed that it is negotiating with prospective takers for some 350 to 400 shops that the joint entity needs to sell so the merger will progress. The offloading of stores is required to ensure fair competition for the betting industry and consumer benefits.
The firm’s operating profit went up by 34.4 percent from the same period of the previous year to £52.3 million and comfortably surpassed in-house estimates. Ladbrokes performed extremely well in the United Kingdom and Euro region as revenues in both areas rose 6.4 percent and 7.3 percent correspondingly to £436.6 million and £64.4 million. Meanwhile, earnings from the company’s digital group climbed up 40.9 percent compared to the same period in 2015.
Ladbrokes is currently the second-largest bookmaker in the UK. It agreed to a merger worth 2.3 billion with Gala Coral, the third-biggest bookmaker in July of 2015. The deal will make it the biggest bookmaking company in the UK.
However, the Competition and Markets Authority (CMA), a regulatory agency announced it pinpointed at least 642 locations where the merger can possibly affect competitors.
Ladbrokes maintains around 2,150 outlets in Britain and another 77 in Northern Ireland while Coral operates 1,850 units in the UK.
In a statement, Ladbrokes explained that it was confident that a competitive process will be reached towards the end of September. Following this it will implement major business restructuring before the end of 2016. As a result, Ladbrokes’ shares went up five percent during morning trading.
The bookmaking industry in the UK has experienced an unprecedented level of consolidation during the last two years in reaction to additional taxes and stringent regulations both in the domestic and overseas markets. The merger came after Irish Bookmaker PaddyPower and Betfair, the world’s biggest online betting exchange operating in London combined to operate as one entity.