Ladbrokes, Britain’s biggest listed bookmaker, got an earnings boost from the soccer World Cup and the company added yesterday that it was on track to meet full-year targets, sending its shares higher.
Operating profit for the three months to 30 September rose 128 per cent from a year ago to £51.1m. The World Cup resulted in a surge in business, with revenue rising 12 per cent, while the company also lowered its operating costs. Ladbrokes is the latest gambling company to have reported an upbeat business outlook.
In August, rival William Hill said it was on track to meet full year-expectations after reporting higher first-half earnings, while earlier this month Rank forecast a full-year performance around the top end of analysts’ expectations as it posted higher third-quarter revenue.
“We see some cyclical recovery potential in retail, some catch-up potential relative to William Hill and reasonable long-term growth potential in online,” Morgan Stanley analysts said in a research note. Morgan Stanley kept an “equal-weight” rating on Ladbrokes shares.
In August, new Ladbrokes’ chief executive Richard Glynn restored the dividend and unveiled a management shake-up along with a deal to buy gaming machines for Ladbrokes’ outlets. Glynn said Ladbrokes remained interested in the privatisation of state-owned betting firm the Tote, but it was not a top priority.
City A.M. Reporter