TIDMLCL
RNS Number : 2167M
Ladbrokes Coral Group PLC
27 July 2017
Ladbrokes Coral Group plc (LSE: LCL)
Legal Entity Identifier: 213800P7FJOPCV4H3J04
Post close trading update for the period 1 January 2017 to 30
June 2017
27 July 2017
On track for the full year; Synergies upgraded to GBP150m
-- Synergies upgraded to GBP150m per annum by 2019, more than double the original estimate
-- Strong Digital performance with net revenue 17% ahead (21%
ahead after adjusting for the Euros in 2016), benefiting from our
market-leading multi-channel strategy
-- Like-for-like([3]) UK Retail OTC stakes in line with
previously reported rates but impacted by management's planned and
considered commercial actions to drive bottom line performance
-- On track to meet our expectations for the full year
Commenting on Ladbrokes Coral trading in the period 1 January
2017 to 30 June 2017, CEO Jim Mullen said:
"Ladbrokes Coral posted a strong performance in H1 with results
in line with our expectations and another significant upgrade to
synergies, which at GBP150m will now be well over double the level
initially announced.
Digital has performed well, with net revenue growth of 17%
particularly pleasing against a backdrop of a significant period of
platform integration and a competitive trading environment. In UK
Retail, a key management focus has been on addressing some areas of
ongoing inflationary pressure on the cost base and on improving
gross win margins. Examples include the planned and considered
commercial decisions taken on horse racing media costs and horse
racing gross win margin. Whilst these have had a negative impact on
stakes, they have been profit positive and helped mitigate some of
the impact of underlying run rates. Furthermore, we are pleased to
have resumed showing pictures from all UK racecourses following the
agreement of a profit-share deal with The Racing Partnership
reported last week.
On integration, we have successfully migrated our UK Digital
brands to a single platform and completed the consolidation of our
head office team. The further synergies identified re-emphasise the
merits of the merger and the potential of the enlarged Group, with
the additional savings delivered in 2017 offsetting the impact of
current UK Retail run rates. We therefore remain in line with our
expectations for the full year."
Trading update([1,2])
Digital net revenue was 17% ahead of last year (14% ahead on a
constant currency basis ("cc")). Sports net revenue was 25% ahead
(cc +18%) with sports stakes 23% ahead (cc +18%). After adjusting
for the Euros in 2016, sports net revenue was 34% ahead (cc +27%)
with sports stakes 27% ahead (cc +21%). Sports gross win margin of
9.0% was 0.4pp ahead of last year. Gaming net revenue was 11% ahead
of last year (cc +10%) and 15% ahead (cc +14%) in the
sportsbook-led brands.
UK Retail net revenue was 6% behind last year. OTC net revenue
was 11% behind (9% excluding the Euros). Like-for-like([3]) OTC
stakes were 7% behind, impacted by the successful structural
improvement in the Ladbrokes Retail OTC horse racing gross win
margin and the savings in media costs from not showing certain
racecourse content. Both actions improved Retail profitability and
adjusting for them resulted in underlying like-for-like([3]) OTC
stakes 5% behind last year. OTC gross win margin of 17.9% was 0.3pp
behind last year (Ladbrokes: 17.5% +0.1pp, Coral: 18.4% -0.9pp).
Machines net revenue was 1% behind.
European Retail net revenue was 1% behind last year (cc -10%),
and 1% ahead (cc -9%) after adjusting for the Euros. Poor football
results in Italy meant that while amounts staked were 17% ahead of
last year (cc +5%), OTC gross win margin was only 14.8%, 3.6pp
behind last year.
Total Group net revenue was 1% ahead of last year (cc -1%).
Total Group operating profit for H1 is expected to be within the
range GBP153.3m to GBP158.3m - 4% to 7% ahead of last year.
Synergy update
Synergy guidance has increased from GBP100m to GBP150m, driven
primarily by further cost savings identified through procurement,
IT and the harmonising of horse racing gross win margins across the
UK Retail brands. The annualised phasing of the delivery of the
GBP150m synergies is expected to be circa GBP45m in 2017, GBP130m
in 2018 and GBP150m in 2019, with costs to achieve of between 1.1 -
1.15x fully matured synergies.
Notes:
(1) 2016 and 2017 financials upon which year-on-year growth
rates have been calculated are on a proforma basis and exclude all
results from the 360 shops that Ladbrokes Coral plc was required to
sell as part of the CMA's remedy findings into the merger of
Ladbrokes PLC and the Coral Group
(2) Growth on a constant currency basis is calculated by
translating both current and prior year performance at the average
2017 exchange rates
(3) UK Retail stakes percentage change is reported on a
like-for-like basis and adjusted for the impact of the Euros in
2016. The 2016 period on which the year on-year change has been
calculated has been adjusted to include the same number of days and
days of the week (Sunday 3 January 2016 to Friday 1 July 2016)
(4) Pre non-trading items
Enquiries:
Ladbrokes Coral Group plc: Jim Mullen, CEO
Paul Bowtell, CFO
Donal McCabe, Group Communications Director
Paul Tymms, Director of Investor Relations
+44 (0)20 8429 7777
Forward looking statements
This document contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this document and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
our results of operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this document and, unless otherwise required by
applicable law, the Company undertakes no obligation to update or
revise these forward-looking statements. Nothing in this document
should be construed as a profit forecast. The Company and its
directors accept no liability to third parties in respect of this
document save as would arise under English law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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July 27, 2017 02:01 ET (06:01 GMT)
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