Tough times on high street hit Ladbrokes Coral
Tough conditions on the high street have hit Ladbrokes Coral’s estate of betting shops according to the bookmaker’s latest trading update issued last week.
The victory of One For Arthur in the Grand National along with punter-friendly football results had also pegged them back.
Chief executive Jim Mullen said trading for the year to April 23 had been “in line with our expectations”.
Group net revenue was up five per cent, while digital net revenue rose by 22 per cent.
Mullen added: “We see encouraging trends in digital sportsbook and gaming with continued enthusiasm for our multichannel products in all our major markets and over a million customers now signed up in the UK alone.”
However, net revenue in British betting shops was down two per cent. Gaming machine net revenue rose by just one per cent, while amounts staked over the counter (OTC) were down seven per cent.
“UK retail OTC stakes continue to exhibit the negative trends reported since the middle of 2016, driven by the challenging UK high street environment and our own focus on the multichannel opportunity,” Mullen said.
Sports results in Britain “gave with one hand and took with the other”, Mullen added.
One For Arthur’s victory in the Grand National had broken a five-year run of bookmaker-friendly results in the race, although the meeting as a whole was kind to bookmakers, helped by the defeats of old favourites like Cue Card and On The Fringe.
Ladbrokes Coral’s share price fell by 5.5p to 122.9p on the back of the news, recovering to 125.6p by the end of the week..
Cheltenham results boost Paddy Power Betfair
Paddy Power Betfair also updated the market last week, with operating profits more than doubling in the first quarter.
The Cheltenham Festival was cited as a factor with 19 of the 28 races going their way this year, compared to only 11 in 2016.
The group, which in March detailed a revenue increase of 18 per cent to £1.55 billion in its first full-year results as a merged company, saw its underlying operating profit hit £91 million in the three months to March 31, an increase of 114 per cent on the same period in 2016.
The group’s underlying Ebitda (earnings before interest, tax, depreciation and amortisation) rose by 83 per cent on a constant currency basis to £111m.
Paddy Power Betfair also revealed it has benefited from the fall of the pound against the euro in the wake of the UK’s vote to leave the European Union, with the company saying it witnessed “a £23m benefit from the translation of non-UK revenues due to the weakness of sterling”.
Chief executive Breon Corcoran said: “Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth.
“Combined with the annualisation of merger-related cost savings and continued focus on operating efficiency, this resulted in a doubling of operating profits in the first quarter.”
However, just like Ladbrokes Coral, Paddy Power Betfair said results began to turn the way of punters in April.
“Since the end of the first quarter, at high-profile events such as the Grand National, Premier League football and the US Masters, results favoured customers, and overall gross win margins were weak in April,” said Corcoran.
FOBT report breached rules
The Association of British Bookmakers won a PR victory last week when the Parliamentary Commissioner for Standards found a report published in January by MPs who support a major cut in the maximum stake on gaming machines was in breach of the rules governing all-party parliamentary groups (APPGs).
The report from the Fixed Odds Betting Terminals APPG called for a £2 per spin maximum to be imposed from the current £100.
It prompted association of British Bookmakers chief executive Malcolm George to complain to the standards Commissioner Kathryn Hudson that the APPG, chaired by Labour MP Carolyn Harris, had not been transparent about who had helped fund the report.
The associate members who provide funding for the group include gaming machine industry trade body Bacta, the Hippodrome Casino, casino and arcades machine manufacturer Novomatic, plus casino and arcades company Praesepe, who the ABB said were “vested interests” who would benefit should the recommendations of the report be implemented.
The commissioner found the APPG had failed to record who attended the group’s meetings or take proper minutes, had not put an official disclaimer on its report to make clear it was not an official house of Commons publication, failed to meet a rule on transparency by making clear it received free help from public affairs company Interel, who have done work for the likes of Bacta and Novomatic, and failed to reveal Interel’s status as a donor on the report’s front cover.
However, the commissioner found that the breaches were “all at the less serious end of the spectrum”.
George said: “We are delighted the Standards Commissioner recognised four clear breaches of the rules and upheld our complaint.”
RMG courses receive increase in media rights payments
The 34 British racecourses affiliated to Racecourse Media Group, which include Ascot, Cheltenham, Goodwood and York, received £85.5 million in media rights payments in 2016, a six per cent increase on 2015.
“I think it is testament to the strength of the product which I think has got better and better,” RMG’s chief executive Richard FitzGerald said.
Betting shop service TurfTV provided £52.2m of that total but from April 2018 the courses’ betting shop rights switch to SIS, which FitzGerald believes will help boost payments to their courses to £100m next year.
“I think we’re on a good course,” FitzGerald said. “What it allows us to do, along with the levy, is really build those relationships with bookmakers that, ironically, are much better than they have been for a while.
“We need to make them really strong, and what I think is the real opportunity for racing and bookmaking is to build on that because we need each other.”
Other highlights have included streaming and international betting service GBI racing – the joint venture between Racing UK and At The Races.
FitzGerald said: “We continue to be pleased with how the online bookmaker streaming market has come on; it continues to deliver probably above our expectations.
“We now have 21 online bookmaker licences and that has really helped fuel the engine.
“GBI also continues to please with its growth in the last couple of years, in new and existing territories.”
What’s happening this week
William Hill issue their trading update for the year to April 25 on Tuesday.
Analyst Gavin Kelleher of Goodbody said in a note: “Given the start to the year and easy comparatives, it should not come as a major surprise if William Hill reports a decent update next week.
“Any improvement in underlying KPIs in online is likely to be well received by the market.
“This will mean that of the three main concerns at the start of the year (online share loses, CEO appointment and machines regulatory risk), two have been resolved.”[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][bsf-info-box icon=”Defaults-envelope-o” icon_size=”32″ pos=”left”]For more information about Racing Post’s B2B services, contact us or browse more of b2b.racingpost.com.[/bsf-info-box][vc_column_text]Racing Post B2B caters for all digital content requirements across web, mobile, tablet and retail. But we are more than just a data provider – we enhance raw data with the best and most recognisable content authored by the biggest names in sports betting. Racing Post B2B offers an unrivalled worldwide content portfolio for bookmakers and media associations. Acknowledged throughout the racing and gaming industries, the Racing Post creates bespoke products suited to your audience that will enable your company to maximise profitability by offering unique data, editorial or multi-media solutions.[/vc_column_text][/vc_column][/vc_row]