Ladbrokes’ phone betting profits plunge by £20m

Aug 8 2008 by Alex Turner, Liverpool Daily Post

LADBROKES’ Liverpool-based telephone betting operation struggled in the first six months of the year as operating profits fell by more than £20m.

The gaming giant said the telephone betting business remained “difficult” and blamed competition from businesses based offshore which, it said, benefit from “favourable regulatory and tax regimes”.

Most of the decline in profits was attributed to high-rollers – gamblers who might stake £10,000 on a single bet – with operating profits down by 33%. There was a small fall, of £1.1m, from its other gamblers.

However, call volumes were down 12% as the number of active customers fell 7,200 to 90,200 and the average number of gambling days for its players fell 9%.

Despite the smaller volumes, Ladbrokes has taken on 30 new staff at its Aintree base recently, where it employs about 180 staff. However it said any future staffing increases will be gradual.

The expansion of its call centre is possible because Vernons has completed its move from the premises after it was bought by football pools operator Sportech last year.

In February, Ladbrokes said its telephone betting business had generated an operating profit of £36m in the first seven weeks of the year. But for the six-month period, operating profit reached only £42.2m.

The group’s profits were down to £126.7m from £154.4m after “a number of poor sporting results”, including Royal Ascot and the early stages of Euro 2008, hit margins in June.

Ladbrokes’ chief executive Christopher Bell said he was satisfied with the first-half performance and expects the group to meet its full year expectations.

He said: “We remain focused on growing our business organically through increased investment in customer acquisition, retention and loyalty, utilising our flexible and integrated systems across all our business channels.”

Mr Bell's optimism reflected trading at the start of the second half-year, with gross win between July 1 and August 5 up 11% overall and by 6% in UK retail. Gross win is the amount left behind by losing punters.

alex.turner