Online gambling is on the rise for bookmaker Ladbrokes Coral as high street sales dropped in the first half of the year.
The firm's pro-forma group revenue, which includes results for both Ladbrokes and Coral in the year before their merger, grew one per cent to £1.2m, driven by strong growth in digital.
UK retail net revenue fell six per cent to £697.2m in the six months to the end of June, from £738.5m the previous year, as customers shunned the high street for online gambling.
Digital net revenue rose 17 per cent to £374.5m.
Ladbrokes increased its interim dividend for the six months to the end of June to 2p, from 1p in 2016.
The company's shares lifted 1.02 per cent to 118.8p at the market open.
Why it's interesting
Ladbrokes Coral is up against regulatory hurdles across the industry as well as unfavourable sporting results, but chief executive Jim Mullen said the business was "in good shape".
"The business is now looking to the second half with confidence," he said, adding that the bookmaker is well-positioned for making the most of the opportunities presented by the merger with Coral. Synergies from the merger are expected to be £150m per year by 2019, more than double the original estimate.
"The interim results leave us in line with our expectations for the year and while there remains much to do, we are confident in the opportunities that exist for the business," Mullen said.
Although the firm added it's achieved strong trading figures in the seven weeks since the end of the half, Nicholas Hyett, equity analyst at Hargreaves Lansdown said it's not all plain sailing.
The second half of the year should see the result of the government's triennial review of the gambling industry, and particularly rules governing fixed-odds betting terminals, [which] accounted for 33 per cent of group revenues this half, and 57 per cent in UK retail.
As the political football of choice for UK politicians and media alike, increased regulation of these machines looks inevitable. That threat probably explains why the group is currently trading at a significant discount to its historical average.
Read more: Ladbrokes Coral high street revenues decline
What Ladbrokes Coral said
Ladbrokes Coral continues to make good operational and financial progress. We entered the year with ambitious targets for the first half to substantially complete the integration of our teams and migrate UK Digital to a single platform. We delivered on both fronts and at the same time kept the business moving forward.
The increase in the dividend reflects both the progress made, the opportunities offered by the merger and our confidence in the future.