TIDMLAD
RNS Number : 7620M
Ladbrokes plc
18 October 2016
LADBROKES PLC ("Ladbrokes" or the "Group")
18 October 2016
Ladbrokes plc (LSE:LAD) announces its trading update for the
three months ended 30 September 2016 (the period or Q3):
RECREATIONAL STRATEGY DELIVERS; 4(TH) CONSECUTIVE QUARTER OF YoY
NET REVENUE GROWTH
Q3 2016(1)
----------------------------------------------------------------------- ---------------
Group net revenue +12.1%
UK Retail net revenue +1.9%
OTC stakes -4.3%
OTC gross win margin 16.1% (+0.6ppt)
Machine gross win +4.6%
Digital net revenue +48.2%
Digital KPIs Stakes Actives G'win margin Net revenue
Ladbrokes.com plus Exchanges +32.7%
Sportsbook(2) +26.2% +35.6% 7.7% (+0.9ppt) +47.9%
Gaming(2) na +39.5% na +23.7%
Ladbrokes Australia
(local currency) +50.6% +42.5% 10.3% (+2.0ppt) +89.6%
European Retail net revenue +11.3%
----------------------------------------------------------------------- ---------------
-- Q3 financial performance supportive of our full year expectations
-- Continued strong yoy growth trends: 4(th) quarter of Group
net revenue growth; Ladbrokes.com: 11(th) quarter of sportsbook
staking growth; 8(th) quarter of gaming growth; Australia: 9(th)
quarter of staking growth
-- Margin benefited from strategic focus on recreational
customer base, with growth in BetStation and football but impacted
by continued poor horse racing festivals (Goodwood and York)
-- Multi-channel delivers over 120,000 actives since launch
through acquisition via Retail team
Jim Mullen, Chief Executive, commented:
"We've emerged from a busy summer of sport with more evidence
that our strategy of appealing to the recreational customer is
delivering growth and we remain confident of delivering full year
results in line with our expectations.
"Across all our key pillars we have been encouraged by the
customer reaction. We have delivered growth for a fourth successive
quarter in Group net revenue, and in Ladbrokes.com an eleventh in
sportsbook staking and an eighth in gaming. In Australia, we've
continued to enjoy tremendous success across all measures in the
form of improved margin, strong staking and actives growth.
"Our margin has been resilient, benefitting from our strategy of
focusing on the recreational customer, deploying BetStation across
the estate and growing in football. This margin has been in spite
of loss-making racing festivals at Goodwood and York; I said at our
half year results in August that sporting results would turn
against us and in Racing they promptly did. However, we did enjoy a
strong end to the Euros and a stuttering start to the season for
Manchester United and Barcelona has been in our favour. With the
Melbourne Cup, an action-packed Boxing Day, the return of the
National Hunt season and an intense programme of top level football
to come, there remain significant opportunities and risks
ahead.
"These results have been achieved by a group of colleagues whose
commitment to delivering Ladbrokes' Plan A has been all the more
impressive given the ongoing work towards completion of our merger
with Coral. Following our agreement to sell 359 shops subject to
CMA approval, we are close to completion of the deal and look
forward to the opportunities it will bring to customers, colleagues
and shareholders."
DIVISIONAL PERFORMANCE
In UK Retail, net revenue increased by 1.9%. Higher OTC margins
had a more normalised impact on Q3 OTC staking which was down 4.3%
or 3.9% on a like-for-like basis although in football, we saw
staking growth of 17.3% as customers respond to our value
proposition. OTC gross win margin of 16.1% was up 0.6ppts year on
year which meant OTC net revenue was broadly flat. Staking through
BetStation increased by 76.7% and represented c.10% of OTC staking
(Q3 2015: c.5%). Machines net revenue grew 4.0% (like-for-like
4.6%) benefitting from our sustained strategy of introducing and
promoting lower staking slots and B3 content which is increasingly
popular with customers.
We have maintained the intensity around our multi-channel offer
and our UK Retail team have delivered over 120,000 actives since
launch in 2015. Multi-channel customers contributed c.11% of
sportsbook net revenue in Q3.
In Digital, Ladbrokes.com and Exchanges net revenue increased by
32.7%. Sportsbook delivered its 11(th) consecutive quarter of year
on year stakes growth with stakes up 26.2% and actives up 35.6%.
Mobile staking increased by 31.6% and now accounts for 78.9% of
sportsbook staking. Sportsbook net revenue rose 47.9% benefitting
from an increased margin of 7.7% reflecting our focus on the
recreational customer. Gaming net revenue was up 23.7%, our 8(th)
consecutive quarter of year on year growth. In Australia, on a
local currency basis, staking grew 50.6% and revenue increased by
89.6% on the back of actives growth of 42.5%.
In European Retail net revenue grew 11.3% (+1.1% on a constant
currency basis). In Belgium(4) OTC amounts staked have increased
9.5% driven by the investment in SSBTs and virtual products. In
Ireland, OTC staking was up 7.9%.
SPORTING CALAR
Having endured customer-friendly results at the Cheltenham
Festival in Q1 and Royal Ascot in Q2, it was difficult to see how
Q3 could be worse, but at a far from Glorious Goodwood and an
expensive Ebor meeting at York we suffered two very painful,
loss-making meetings. Winning favourites such as Franklin D and
Dancing Star at Goodwood, and Postponed and Blue Point at York,
left us cursing the Summer racing festivals. We enjoyed some
respite at the last ever Ladbrokes St Leger meeting in September
where victory for Harbour Law in the world's oldest Classic helped
erase the pain of an expensive meeting 12 months ago.
The Euros finished with the bookmakers comfortably in front and
the start to the football season has been encouraging. Despite Pep
Guardiola's Manchester City finding their groove, once again we
have benefited from a lacklustre start from a Jose Mourinho-managed
team. Beyond the Premier League, the stuttering start to FC
Barcelona's season has seen us enjoy strong results in La Liga.
Rory McIlroy's FedEx Cup win in late September took the gloss
off bookie-friendly upsets in the US PGA. Andy Murray's Wimbledon
victory was surprisingly painless as Novak Djokovic supporters had
been out in force, and Murray's US Open defeat left punters
disappointed.
The return of the traditional National Hunt season in Q4 will
see us once again face up to the reality of dominance from familiar
faces such as Willie Mullins and Ruby Walsh but we will hope for a
more balanced spread of results as we approach the end of the year
and move into the festivals next year. In Australia, the Spring
Carnival gives us the ultimate platform to showcase our brand to
audiences Down Under, culminating in the Melbourne Cup on 1
November.
REGULATORY DEVELOPMENTS
We expect the UK government to commence its Triennial Review of
stakes and prizes on UK gaming machines in the near future and we
look forward to supporting the Government. As ever, we will look
for an evidence-based assessment of the facts in this important
aspect of the industry. We are also working with the Treasury which
has commenced its consultation around the treatment of the industry
under the 4(th) EU Anti Money Laundering Directive.
LADBROKES CORAL MERGER
On 15 October, we announced the sale of 359 shops conditional
upon the CMA's approval and completion of our merger with Coral.
Once approval has been received, we will seek the CMA's consent to
complete the merger subject to the divestiture of one remaining
shop.
Enquiries +44 (0) 208 515 5513
Jim Mullen, Chief Executive
Richard Snow, Chief Financial Officer
Donal McCabe, Group Communications Director
Snehal Shah, Group Financial Controller & Head of Investor
Relations
INVESTOR/ ANALYST CONFERENCE CALL DIAL IN DETAILS - 9:00AM
(Confirmation code: 2350670)
UK: +44 (0) 20 3427 1901 or free phone 0800 279 4992
US: +1 646 254 3367 or free phone +1 877 280 2342
Quarterly trends Table
YoY (except where Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q1 2016 Q2 2016 Q3 2016
stated) excluding
HVC(3)
------------------------ --------- --------- -------- -------- ----------- -------- --------
Group Net Revenue(1) (0.5%) (0.7%) +10.9% +12.5% +10.6% +13.5% +12.1%
------------------------ --------- --------- -------- -------- ----------- -------- --------
UK Retail
------------------------ --------- --------- -------- -------- ----------- -------- --------
OTC Amounts Staked (5.6)% +1.6% +1.1% (1.3)% na +1.4% (4.3)%
------------------------ --------- --------- -------- -------- ----------- -------- --------
SSBT % OTC staking 3.6% 5.3% 8.3% 9.8% na 9.3% 9.8%
------------------------ --------- --------- -------- -------- ----------- -------- --------
OTC Gross Win Margin 16.2% 15.5% 17.3% 17.5% na 17.4% 16.1%
(0.3)pp (1.5)pp +1.7pp +1.8pp +1.2pp +0.6pp
------------------------ --------- --------- -------- -------- ----------- -------- --------
Machine Gross Win
growth +4.3% +4.6% +3.7% +1.5% na +7.9% +4.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Machine Gross Win
per shop per week +8.7% +8.6% +6.4% +4.1% na +9.3% +5.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Total Net Revenue (1.7)% (1.0)% +6.5% +4.1% na +8.6% +1.9%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Ladbrokes.com plus
Exchanges(2)
------------------------ --------- --------- -------- -------- ----------- -------- --------
Total Net Revenue (5.5)% +5.7% +25.1% +57.2% +38.4% +29.5% +32.7%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Net Revenue (23.0)% (0.5)% +53.8% +122% +59.0% +39.4% +47.9%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Amounts
Staked +12.7% +34.1% +43.9% +12.4% +35.2% +26.5% +26.2%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Mobile Sportsbook
Amounts Staked +66.5% +69.0% +77.3% +57.6% na +35.0% +31.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Actives (5.4)% +1.7% +25.5% +27.8% na +42.4% +35.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Gross 6.3% 6.8% 7.0% 7.9% 7.9% 7.5% 7.7%
Win Margin
(2.8)pp (2.1)pp +0.5pp +3.9pp +1.6pp +1.2pp +0.9pp
------------------------ --------- --------- -------- -------- ----------- -------- --------
Gaming Net Revenue +19.1% +11.5% +10.3% +27.3% na +26.3% +23.7%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Gaming Actives +13.2% +29.4% +41.5% +43.8% na +50.6% +39.5%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Ladbrokes Australia
(AUD)(4)
------------------------ --------- --------- -------- -------- ----------- -------- --------
Net Revenue +73.6% +26.3% +76.3% +38.4% na +44.4% +89.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Amounts
Staked +52.7% +61.4% +63.0% +51.5% na +55.7% +50.6%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Actives +65.9% +88.8% +60.2% +86.9% na +66.8% +42.5%
------------------------ --------- --------- -------- -------- ----------- -------- --------
Sportsbook Gross 9.5% 8.3% 11.3% 9.8% na 9.8% 10.3%
Win Margin
+0.8pp (1.2)pp +1.7pp flat +0.3pp +2.0pp
------------------------ --------- --------- -------- -------- ----------- -------- --------
(1 (1) Excluding High Rollers. Year on year performance except where stated
(2) Sportsbook and Gaming are related to Ladbrokes.com only
(3) Adjusted for the impact of losses following significant HVC
activity in Q1 2015
(4) Local currency basis; Australia quarterly data as reported,
not pro forma
This information is provided by RNS
The company news service from the London Stock Exchange
END
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