Digital letdown sees Ladbrokes shares tumble
27 September 2013 2:09am
LADBROKES saw its share price plummet more than seven per cent yesterday as it warned that its digital division would miss profit forecasts.
The bookmaker said that its digital division’s profits would be between £10m and £14m for the year, compared with a consensus market forecast of £27.5m.
“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 Ladbrokes chief executive Richard Glynn on the results.
“The period since the end of first half 2013 has been challenging. Following a difficult trading period for the sector in July, we have seen footfall normalise in our UK retail business, an improvement in OTC amounts staked and reduced volatility in machines,” he added.
Ladbrokes formed a partnership with Playtech, a gambling software provider, in March to boost its online business which has been seen as slipping behind the online efforts of William Hill and Paddy Power.
“The combination of Ladbrokes’ brand strength, its newly invested core technology and Playtech’s proven track record in growing digital revenues through advanced ecommerce and digital marketing has significant potential,” Playtech boss Mor Weizer said at the time of the partnership.
The company’s shares fell to close at 173.8p on the news, a drop of 14.3p from the previous close.