Traditional bookmaker Ladbrokes confirmed an unflattering year with the official release of their results today and they must be beginning to wonder when the tide will turn in their favor. As reported a couple of weeks back net revenue for the entire firm took a hit of 0.4% leaving it at £980.3 million whilst operating profit decreased 4.3%, ending up at £193.5 million. There was no relenting in the digital sector with operating profit well down on last year – 12.3% to £55 million. Digital net revenue fared little better, finishing 3.5% down. Mobile bucked this trend with growth in revenue of 174% and chairman Peter Erskine was bullish on digital prospects for 2012.
“In 2012 we expect to grow Digital revenues, building upon our investments in technology and the growth in customers that has been driven by the increase in marketing spend during H2 2011,” Erskine said in the firm’s annual report.
Lads saw revenue growth across casino (up 2.9%), bingo (2.2%) and games (0.6%) but it will have to go a long way to offset the losses seen in both sportsbook (down 5.2% to £61.7 million) and poker (down 24.5% to £14.2 million). They were further hurt by a number of unfavorable results in football and horse racing in Q4 as well as there being no World Cup in 2011.
Was has happened to make the results slip so dramatically in 2011?
One that clearly needs to see some sort of change is their online strategy. Unlike their competitors, where gains are being made, this part of the business continues to baffle chief executive Richard Glynn and his top boys. It led to a year where they flirted with every kind of partnership or takeover deal they could think of and ended up having to stumble home without so much as a nightcap. One of the best-case scenarios for the Lads could be the Israeli unrest at William Hill Online to return and their relationship with Playtech become “Facebook official.”
If you look at the group’s mobile net revenue (up 174%) they’re obviously doing a lot right and we shouldn’t forget this is a group that generates revenue of almost £1 billion. They just need to make a few changes to the digital side of the business to make sure they’re not cut completely adrift by quick and nimble competitors in what is an extremely lively sector.
