Coral Overcomes World Cup Hangover to Post Slight Profit Gainby
Increased government levies, a limit on gaming-machine stakes and a World Cup hangover failed to prevent U.K. bookmaker Coral Group boosting profit in its final year before a planned merger with Ladbrokes Plc.
Earnings before interest, taxes, depreciation and amortization rose 1.3 percent to 205.3 million pounds ($308 million) in the year ended Sept. 26, the London-based company said Monday. Stripping out one-time effects, Ebitda rose 30 percent, it said.
Like all U.K. bookmakers, Coral has been hit by a triple-whammy of regulatory burdens, including a new levy on online gambling profit. That’s largely offset the rapid growth of the digital betting industry as more bettors place wagers using their smartphones. To reduce costs, bookmakers are amalgamating, Coral’s planned merger with Ladbrokes being just one of a swathe of deals announced this year.
“The merits for consolidation are very strong,” Coral Chief Executive Officer Carl Leaver said in a telephone interview. “We’ve had some significant regulatory impact.”
The point of consumption tax on online earnings reduced profit by almost 29 million pounds in the year. An increase in duty on gaming machines and a limit on the amount customers can stake on them added 17 million pounds to the burden. Coral also had to stand comparison with the prior year, when the soccer World Cup gave a major boost to business across the industry.
The amount of wagers placed increased across all channels in the first eight weeks of the new financial year, though soccer results have favored customers in both the U.K. and Italy, weighing on betting-shop profit.