Online Betting Upgrade Expected To Hamper Ladbrokes First Half Earnings
The second biggest British bookmaker Ladbrokes is preparing shareholders for the expected disappointing first half operating profits in 2014. With over 2,300 retail shops, Ladbrokes are still playing catch up with the largest bookmaker in Britain, William Hill. As we reported last year the mobile sector and online sports betting is where Ladbrokes are falling short of their competitors and as a result have invested heavily on changing their platform.
Ladbrokes had a difficult 2013 as their partnership with Playtech is taking longer than expected to implement. Playtech are a leading software developer and specialize in mobile gaming which is vital for Ladbrokes’ future growth.
Chief Executive Richard Glynn is under increasing pressure and the figures for operating profit in 2013 will make things worse. According to Ladbrokes annual operating profit fell a whopping 33% to £138.3m in 2013. The market which took the biggest hit was its UK retail business that was down 26%. Profits in their digital division were also down 74%. Timing is critical for Ladbrokes as the World Cup in Brazil is around the corner. Although the figures are bad, they are in line with market forecasts due to the change in systems.
The Playtech upgrade is expected to be fully up and running by the time of the World Cup which will see an expected increase in mobile profits. In a statement Ladbrokes said,” Completion of the remaining platform, product and capability upgrades means first-half 2014 group operating profit is targeted to be ahead of second-half 2013 but down on the comparative period, with further growth anticipated through the second half of 2014.”