Ladbrokes plc today announced its results for the half year ended 30 June 2010. Group operating profit grew 5.1% to £103.6 million but Group net revenue was down 2.4% to £492.1 million. The company balance sheet strengthened significantly and Ladbrokes says its eGaming profit improved with the migration of the Sportsbook to Gibraltar in the fourth quarter last year.

Richard Glynn joined Ladbrokes as CEO at the end of April. He stated, “Group operating profit, excluding High Rollers, grew by 5.1% to £103.6 million. Whilst the growth in operating profit was welcome the consumer environment remains challenging. Group net revenue excluding High Rollers fell 2.4%. The benefits of the World Cup 2010 were largely offset by the disappointing horse performance, notably at Royal Ascot.”

He also said, “Ladbrokes is in a strong financial position. The Group’s cash generative nature and the recent HMRC settlement mean it has a healthy balance sheet and, following the termination of some of the 2012 bonds and issuance of 2017 bonds, an attractive debt maturity profile. It continues to enjoy a low corporate tax rate and has now resumed dividend payments.”

A key short term objective has been to improve machine performance. Through increased management focus, year on year growth rates have already increased in recent months. The company today signed a four year machine supply contract with Global Draw that will cover 95% of Ladbroke’s estate with rollout commencing in January 2011.

Since April, Glynn has identified a number of key areas where Ladbrokes has the opportunity to improve performance. These include a focus on the customer, improving the “e” performance, the brand effectiveness and enhancing the technology backbone of the Group. Glynn believes these priorities, supported by targeted investment, will deliver customer satisfaction, revenue growth, margin improvement and operational efficiencies over the medium term. He has announced several management changes including the appointment of Nick Rust from Gala Coral as Managing Director of Retail, effective early 2011.

Glynn said, “On joining as Chief Executive at the end of April, I embarked on a thorough review of the business, particularly its operations and processes (“Project Galvanise”). Much remains to be done but we have made a good start. The Group has strong foundations and a great brand and we are moving swiftly to address historical operational weaknesses.” (E-08.05.10)

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