ref="http://www.cityam.com/company/ladbrokes">LADBROKES issued a surprise profit warning yesterday after poor takings at the Cheltenham Festival and a string of horseracing cancellations dragged profits down £13m in the first quarter of the year.
The bookmaker’s shares fell eight per cent yesterday after the unscheduled trading statement, which dashed hopes that it was turning itself around after problems with its online operations last year.
Ladbrokes said it had always expected first quarter profits to be lower than last year because of a new 20 per cent machine games duty in its high street shops, which came into force in February.
But paying out on favourites at the recent Cheltenham festival and “a proportionately higher impact from horseracing cancellations” has further impacted profits.
Operating profits fell £13m in the three months to March to £37.4m, as a result of increased costs, with revenues from the Cheltenham Festival down £6m year-on-year.
The FTSE 250 firm said it lost £5m in gross winnings from its over the counter operations, blaming the bad weather for 62 race cancellations in the first quarter compared with 36 last year.
It now expects operating profit for the year to be at the bottom of the existing market range of £188m to £215m – down from £206m reported in 2012.
Marc Kimsey, a senior trader at Accendo Markets, said Labrokes’ revised forecast was still “optimistic” given its challenging start to the year.
“A lack of major sporting events such as the Olympics, Ryder Cup or Euros, as in 2012, will only add to 2013’s challenges. This warning could be the first of many,” he said.
Ladbrokes, which last month agreed a partnership with Playtech, said it expects online revenues to suffer some impact from these changes before full benefits are felt in 2014.