Betfair may be getting all the press at the moment with its upcoming float and its threats to leave the UK, but Ladbrokes reminded us it is still here yesterday when it announced a whopping 128 per cent hike in operating profit.
This is obviously to be taken strictly within the context of incredibly weak comparatives and the World Cup boost but still represents good progress. It has kept costs at 2009 levels and its slimmed down debt pile (now at £490m) looks manageable compared to cash generation.
With a valuation of 7.5 times Ebitda, it appears a snip compared to Betfair’s 13.5 times. However, it will struggle to compete with its online rival’s higher margin potential.
Worryingly its average stake declined five per cent year-on-year and William Hill still looks preferable thanks to its more highly developed online strategy. If you’re a betting man it’s worth a punt but keep a closer eye on its rivals.