Not a great day for Ladbrokes, after it reported a 50 per cent fall in profits for 2015 as increased taxes began to have an impact.
Ladbrokes said trading profits fell 50.3 per cent, from £112.2m last year to £55.8m in 2015. That's above analyst expectations - last week Deutsche Bank said it expected profits to fall to £44m.
Statutory pre-tax profits fell into a £43.2m loss in 2015, down from a £37.7m profit in 2014. Group operating profits fell 35.7 per cent to £80.6m - which it said reflected the fact gambling taxation had increased by £50m.
But statutory revenues edged up, from £1.17bn last year to £1.2bn this year.
Basic earnings per share fell 9.9 per cent from 10.1p to 9.1p, while total dividend per share fell 66.3 per cent, from 8.9p to 3p.
Shareholders seemed mollified - share jumped four per cent in early trading, to 125.54p
Why it's interesting
Ladbrokes and its gambling cohort have been hit by a punishing tax regime in recent years - most notably the point-of-consumption tax, which charges 15 per cent on online gambling profits, as well as crackdown on in-store betting terminals. So it's encouraging that the company exceeded Deutsche Bank's doom-and-gloom expectations.
That's not all, though: Ladbrokes has also been dented by impairments in its property portfolio - today it said it had made a £13.4m loss on closure of UK stores, plus another £6.4m loss on European stores.
The light at the end of the tunnel is its impending £2.3bn merger with Gala Coral, due to take place later this year. The two companies are still awaiting approval from the Competition and Markets Authority (CMA) - but given the merger will create the UK's largest high street betting agent, with 4,000 stores and revenues of £2.1bn, it may be a slow process.
What Ladbrokes said
Jim Mullen, Ladbrokes' chief executive, said:
In UK retail, self-service betting terminals are delivering growth, football is up and our retail team are delivering strong multi-channel growth. In digital in the fourth quarter, increased marketing delivered more customers and more staking with Ladbrokes.com net revenue up over 25 per cent and Australia, where the business goes from strength to strength, up over 75 per cent.
The full year figures reflect the costs needed to undertake significant investment to deliver the strategy as well as facing circa £50 million of increased taxation.
Not an easy ride for Ladbrokes - but it may yet weather the storm.