Euro 2016 and a less-than-predictable Premier League season boosted earnings at bookies Ladbrokes and sent shares climbing 3.8 per cent this morning, as it edges closer towards its £2bn tie-up with Gala Coral.
Profits before tax climbed by 61 per cent to £39.8m in the six months to June at Ladbrokes, with operating profits up 34 per cent rising "ahead of management's expectations," the firm's interim report said.
Revenue climbed by 13 per cent to £661.8m, as incomes from both its shops and its website grew. Online revenues climbed 41 per cent compared to the first six months of last year to £158.1m and takings in its high-street stores were up 6.4 per cent to £436.6m.
Why it's interesting
Even-numbered years are always bigger for the bookies - the question is just whether they can turn higher revenues into higher profits. Ladbrokes cracked it in 2016, with shock outcomes in the premier league and Euro 2016 boosting their bottom line.
Bookmakers usually benefit when the outsiders triumph, while punters grab the upper hand if the favourites romp home. Ladbrokes said it expected the tide to turn back in favour of its customers before long, which would see its margins "normalise".
With the Ladbrokes/Gala Coral deal moving one step closer to completion last week after the UK's competition watchdog said the new group would have to sell 400 stores before the merger can be given the green light, both groups need to post good results to keep the plans on track.
Ladbrokes said today it has already started to look for potential buyers and wants to have the bidding process wrapped up by the end of September so the organisation can get to work on an organisational reshuffle by the end of the year.
What Ladbrokes said
Jim Mullen, chief executive of Ladbrokes said:
We will continue to compete hard on pricing, product and customer services and maintain a relentless focus on meeting and exceeding customer expectations. With the merger on the horizon we recognise there is a lot of hard work still to come, but this is an exciting time for Ladbrokes and we approach the opportunities ahead with a strong sense of confidence.
The house always wins.