Profits for its online arm are expected to hit the £10m-£14m range, falling well short of the £27.5m it had expected. It’s the second profit warning from the gambling company in as many months. In August, it reported a steep decline in profits, citing a slowdown in gambling machine revenues.
Pre-tax profits for the first half of 2013 were down 49% compared with last year, to £551m. Shares were down 10% in early trading.
The online gambling market has grown rapidly over the past few years and Ladbrokes' rival William Hill has done well to capitalise on it, with online boosting its profits by a fifth earlier this year. But Ladbrokes' internet expansion has yet to hit the jackpot.
It was hoped its tie-up with software developer PlayTech, former partner of William Hill (oh, the incest) would give its online business a lift, but the effects have taken longer to filter through than expected.
‘Our digital earnings have been disappointing, reflecting a lack of competitiveness in sportsbook, lower margins than planned and a greater disruptive impact than expected from the transition necessary to grow digital for the long term,’ said chief executive Richard Glynn.
It’s not all bad news for the bookies, though: the company also reported trading in its shops had improved, with football bets and over-the-counter stakes picking up.
Ladbrokes has over 2,500 branches on the high street, and as much fuss as the expansion of these stores is causing (Mary Portas called high street betting shops ‘a blight’), it is clearly a winning gamble for the betting companies.