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Ladbrokes plc LAD Interim Management Statement

  Ladbrokes plc (LAD) - Interim Management Statement

RNS Number : 9523O
Ladbrokes plc
18 October 2012




18 October
2012





                LADBROKES PLC Q3 INTERIM MANAGEMENT STATEMENT



Ladbrokes plc announces its IMS for the 3 months ended 30 September 2012 ("the
period").



                               Q3 2012 v Q3 2011
Group net revenue ^(1)              + 3.9%
Group operating profit ^(1)(2)      £49.2m
UK Retail net revenue               + 5.4%
- Machines net revenue             + 11.5%
- OTC net revenue                  + 0.6%
Digital net revenue                 + 6.1%



           CONTINUED GROWTH IN RETAIL, SPORTSBOOK ROLLOUT ON TRACK



Group

· Net revenue^(1)up 3.9%

· Operating profit of £49.2 ^(1)(2) million 0.4% up year over year  (2011: 
£49.0 million after amortisation)

· Recently implemented  trading enhancements driving  accuracy of  pricing 
and reduction in unprofitable turnover

· Trading developments set to continue; Andy Wright, new trading director,
now on board



UK Retail

· Continued growth  in shop  net revenue with  machines up  11.5% and  OTC 
ahead 0.6% in the period

· OTC gross win margin of 16.9% (Q3 2011: 16.0%)

· Reduction in  OTC amounts staked  of 4.9% in  part reflects increase  in 
weather affected  horseracing  cancellations  (38 versus  2),  effect  of  the 
Olympics and impact of trading enhancements

· Operating costs well controlled and within guidance



Digital

· Website development on plan,  first iterations of new online  sportsbook 
successfully released

· Transfer of active and new customers  on track for end Q1 2013, in  line 
with interims guidance

· 21.8%  growth  in  sportsbook  net  revenue  with  stronger  margin  and 
continued growth in actives

· Bet in Play now 66%^(3) of sportsbook stakes (Q3 2011: 50%) with  events 
now expected to exceed plan of 60,000 in 2012



^(1)Continuing operations, excluding High Rollers

^(2)Profit before tax,  net finance  expense and  exceptional items.  Includes 
amortisation of customer relationships

^(3)Excluding all horseracing and greyhound product



Richard Glynn, Chief Executive, commented:



"Consistent growth of both machine  and OTC net revenue,  as well as a  robust 
control of costs reinforces the resilience  and strong cash generation of  our 
UK Retail business. Despite having fully annualised last year's launch of  the 
Global Draw  terminals, we  remain  confident that  our  focus on  player  and 
machine yields,  as well  as an  increase in  machine density,  will  generate 
further growth. 



We are now delivering against a clear programme to complete the rollout of the
digital sportsbook and migration of customers by the end of Q1 2013, whereupon
we will  focus increasingly  on  enhanced CRM.  Enhancements in  trading  are 
leading to early  signs of  an improvement in  the quality  of turnover,  with 
further developments in pricing and liability management still to come.



Though the  economic outlook  remains uncertain,  we remain  confident in  our 
delivery and are in line with the Board's expectations for 2012." 



**************





UK RETAIL

UK Retail net revenue increased by 5.4%.



Machines continue to grow notwithstanding the annualisation of the Global Draw
rollout and expected seasonal low in  Q3, which was exacerbated by the  impact 
of the Olympics. Net revenue  for the period was  up 11.5%. The average  gross 
win per  terminal week  across the  estate was  £937, with  the year  to  date 
average now at £943. The average number of machines per shop is now 3.87.



We are beginning  to use insights  drawn from  Odds On to  inform analysis  of 
customer  yield  on  machines.  We  will  trial  enhanced  machine  management 
techniques and rollout exclusive B3 games, during Q4.



OTC net revenue grew by 0.6% over the period with a comparatively strong gross
win margin of 16.9% more than  offsetting a 4.9% reduction in amounts  staked. 
^(4)



Operating costs  in UK  Retail for  the full  year are  expected to  be up  6% 
overall, in line with previous guidance.



During the  period  we  opened 16  new  shops,  acquired 12,  closed  12,  and 
refurbished 19. We  expect to have  opened/acquired around 80  shops over  the 
course of the year.



EUROPEAN RETAIL

In Ireland a slightly stronger gross  win margin partially offset a  reduction 
in amounts staked. Net revenue  was up 1.7% on  a constant currency basis  and 
down 5.4% unadjusted.



In Belgium, last  year's positive  tax change  has now  fully annualised.  Net 
revenue in the period was  up 8.8% on a constant  currency basis but lower  by 
6.0% unadjusted.



In Spain a particularly  low margin on football  in September exacerbated  the 
effect of  a decline  in  like for  like staking  in  Madrid. Overall  we  are 
continuing to expand the business which is now achieving break even EBITDA  in 
the core regions of Madrid and Aragon.



DIGITAL

The new sportsbook  website was  rolled out  to selected  groups of  customers 
during  the  period.  This  process,   as  well  as  additional  upgrades   in 
functionality, will continue throughout Q4.  Our plan to migrate customers  by 
the end of Q1 2013 remains on track.



Digital net revenue  grew 6.1% in  the period with  sportsbook growing  21.8%, 
casino and games slightly ahead by  1.1%, bingo down 6.1% and poker  declining 
by 25.7%.



Sportsbook growth in the period reflects continued growth of active  customers 
and a stronger margin (2012: 7.6%^(5) versus 2011: 6.1%).



Mobile revenues remain strong and 40% of all digital sportsbook customers  are 
now betting via their mobile device.



TELEPHONE

Net revenue down by 5.9%  in the period with  staking marginally up year  over 
year.



HIGH ROLLERS

High Rollers generated an operating profit  of £6.9 million (Q3 2011: loss  of 
£0.7 million).







^(4) Includes  £2.7 million  gross win  relating to  Euro 2012  - adjusted  Q3 
margin 16.5%

^(5) Includes  £0.9 million  gross win  relating to  Euro 2012  - adjusted  Q3 
margin 7.3%

















MATERIAL EVENTS, TRANSACTIONS AND FINANCIAL POSITION

Net debt has further reduced by £60.8  million from £397.0 million at 30  June 
2012 to  £336.2 million  at 30  September 2012.  With capital  expenditure  Q4 
weighted and with the interim  dividend still to be  paid, we expect year  end 
net debt to be above this level,  though below the position at H1. There  were 
no other material events or  transactions that impacted the Group's  financial 
position during the period.





Note: the figures in this trading update are unaudited.





********************************



A conference call for analysts and investors will be held at 9am (BST).



To participate in the conference call dial, +44 (0)20 7136 2050 (UK
participants) or +1 646 254 3361 (US participants), quoting confirmation code
3944085



A recording of the call will be available for seven days on +44 (0)20 3427
0598 (UK) or

+1 347 366 9565 (US), confirmation code 3944085





Enquiries



Richard Glynn  Matt Sharff

Chief Executive Officer  Head of Investor Relations  +44 
(0) 7854 184 808



Ian      Bull             Ciaran 
O'Brien 


Chief   Financial   Officer   Director   of   Corporate 
Communications + 44 (0) 7976 180 173





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IMSUBVBRUNARAAA -0- Oct/18/2012 06:00 GMT
 
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