Ladbrokes Warns of Lower Annual Operating Profits
Although Ladbrokes is a British bookmaker, it is a favorite sports betting platform in Canada. But despite the betting firm's popularity across the Atlantic, its investors have been warned that its annual operating profits will be lower than expected.
Ladbrokes confirmed that poor performance from horse racing, bad economic conditions and a lackluster performance through its online gambling platform all contributed to its disappointing first quarter results.
The unscheduled trading statement resulted in Ladbrokes shares falling 8% on the London Stock Exchange where the bookie trades.
In recent years, Ladbrokes has had trouble catching up to its chief rival, William Hill, which has managed to make great strides in the online gambling business thanks to its joint venture with Playtech, William Hill Online.
Ladbrokes has also been threatened by the entry of a number of new sports betting groups trying to elbow their way in to an increasingly competitive industry.
Ladbrokes issued a statement regarding its performance in the first three months of 2013, explaining the disappointing numbers.
Tough Trading Conditions for Ladbrokes
"The trading environment and economic conditions since the start of the year have remained challenging, when combined with a number of specific one-off factors in the later part of the period, have driven a softer first quarter than expected," said the Chief Executive Officer for Ladbrokes, Richard Glynn.
Some of these factors mentioned by Glynn included payouts on Cheltenham race favorites and a number of cancellations of races around he world.
As a result, operating profit dropped £13 million to £37.4 million in the three months ending March 2013.
Ladbrokes believes that its annual operating profit by the end of 2013 will be around £188 million, compared with 2012's £206 million.
Ladbrokes Invests in Online Gambling
In recent months, share prices for Ladbrokes started to pick up after the group announced that it had signed a deal with software giant, Playtech to develop an online joint venture that would compete with William Hill.
Nonetheless, investors were wary about recommending the group after the Ladbrokes sportsbook annual performance predictions.
Analysts noted: "With retail trading flat at best and limited momentum online, Ladbrokes appears much more at the risk of sporting results than its closest peer William Hill."
William Hill is due to publish its first quarter trading statement on Friday.
The benefits of Ladbrokes' partnership with Playtech will only be felt at the end of 2014, before which online revenues are due to suffer.
