Revenue at Ladbrokes Coral up 11% after strong digital performance
Significant growth in its online and European retail operations has put revenue at Ladbrokes Coral Plc up 11% in Q3 2017 one year after the merger between the two operators.
Net revenues were up 11% with 16% growth in digital sportsbook revenue playing a major part. Online gaming revenue also grew by 6%, with Australia and Italy experiencing significant growth.
Coral performed especially strongly, with 13% growth on the year. However, the Ladbrokes brand continues to suffer from a fall in retail revenues in its UK retail offering, as customers increasingly flock to digital platforms.
The figures are largely in-line with forecasters’ expectations and have been well received by investors, after a dip in revenue in Q2 of 2017.
Commenting on the results, Group CEO, Jim Mullen, said:
Our digital performance is strong and the Ladbrokes brand in Australia and the Eurobet brand in Italy continue to post very strong revenue growth. In the UK, the Coral and Gala brands also posted very pleasing growth, and we continue to transition our approach to customer acquisition and retention in Ladbrokes.com to focus on improved profit conversion.– Jim Mullen, Ladbrokes Coral Group CEO
Concern over declining UK retail performance
However, this strong digital performance only served to offset the damage currently being done by the group’s under-performing UK retail division. Year-on-year performance shows that the retail division in the UK was down 4% net. Much of this decline was taken on by the Ladbrokes brand. UK retail takings were down 9%, while a decline of 5% in the total amount of stakes taken resulted in a 4% drop in net betting revenue at Ladbrokes.
With a consultation currently under way surrounding how strictly to regulate and restrict the betting limits on fixed-odds betting machines, there are fears that the firm could be one of the biggest losers should low betting limits be introduced. The group were also fined £2.3m by the UK Gambling Commission in November.
While domestic performance was weak, the group actually recorded a 17% net revenue increase for the its complete European operation.
It’s just a year after the two brands merged and despite the setbacks, confidence remains high that the group’s retail division can be improved. Measures include a content deal with The Racing Post to improve the racing content in betting shops and a structural change to improve profitability within the UK retail division.