Ladbrokes Coral's shares are on the up as bad run of results fails to hamper annual performance

 
Oliver Gill
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Melbourne Racing
Ladbrokes Coral has hit out at government plans to impose a horse racing levy (Source: Getty)

Ladbroke Coral's share price jumped over three per cent this morning after revealing its results are on track to fall in line with expectations.

The figures

Operating profit is expected to be in the range of £275m-£285m. The formerly separate entity Coral contributed around £179m of this with the original Ladbrokes division generating £101m.

The profits are a decent jump from 2015 when combined the two firms made around £235m.

Fourth quarter trading jumped by 18 per cent, despite "poor sporting results in the UK". Online trading in particular was key, with both firms contributing double-digit growth.

Read more: Bookie levy: Racing "is in danger of pricing itself out of friends"

Sports margins disappointed in the final three months, narrowly missing targets. However, Australian operations had a bumper time with revenue leaping by 45 per cent.

Why it's interesting

Today's trading statement contrasts with the fortunes of rival bookie William Hill. Its shares fell after announcing profits would be around £20m lower than expectations. Funnily enough, it also referenced unfavourable sporting results.

The trading updates of two of Britain's best-known high street bookies straddled an announcement over the weekend that the government would force gambling firms to hand over 10 per cent of their horse racing profits to fund the sport.

Ladbrokes and Coral first revealed they were in talks over a possible merger in July 2015. After protracted discussions with market regulators, the Competition and Markets Authority signed off the deal in November 2016.

Read more: Horse racing gets "critical" multi-million pound boost from levy

Reflecting on the final quarter Jim Mullen, Ladbrokes Coral chief exec, said it was "one of significant activity with the completion of the merger, [with] good progress on integration along with the necessary shop disposals and a busy sporting schedule".

What the company said

Mullen said:

While the sporting gods did not look favourably on us in the period, it is pleasing to report that the business continued to perform well and that our full year numbers will be in-line with expectations.

It has been an encouraging start to the life of Ladbrokes Coral Group plc. Good progress is being made on all the key integration workstreams.

We saw continued growth in our digital division with Australia going from strength to strength and further growth in multi-channel sign ups.

What analysts said

Simon Davies of Canaccord Genuity said:

Ladbrokes Coral delivered a reassuring trading update, confirming significant operational improvements from both the strategic review and Coral merger, and delivering FY16 results in line with expectations, despite a c.£15m profit hit from a poor run of sporting results through December.

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