Ladbrokes plc today has issued an Interim Management Statement for the four months ended 30 April 2010. Group profitability remains broadly in line with expectations, with Group net revenue down 6% and operating profit (excluding High Rollers) up 3%. High Rollers operating profit for the period was £8.9 million. Net debt of £515 million is down £179 million since year end.

Richard Glynn, Chief Executive, said, "Although only a few weeks into my role as Chief Executive of Ladbrokes I am hugely enthused by the longer term opportunities available to the company and I am excited at the prospect of revitalising the Ladbrokes brand and re-energising the business.”

UK Retail total net revenue declined by 8%. Over the Counter (OTC) amount staked declined 10% with the average stake per slip declining 1.1% to £8.10. After the January year on year fall of 17%, which was exacerbated by bad weather, the trends have improved with April down 7%. OTC net revenue declined 11% over the prior period as the lower gross win was partially offset, as expected, by lower levels of OTC free bets.

The average weekly gross win per gaming machine was £712 compared to £708 for the same period in 2009, with total machine gross win up by 1%. Machine net revenue declined 1% owing to the higher level of VAT charged in 2010 compared to 2009. The year on year gross win per terminal per week performance was up 6% in April as the disruption from rolling out the Revolution platform ended. The trial with the potential suppliers is ongoing and a decision is expected in the summer.

Costs remain a key focus with costs down 7% over the period (3% excluding the VAT refund) and full year total operating costs are expected to be flat year on year. During the period Ladbrokes has closed 16 shops and opened 9 new licences, and remains on track to open at least 50 new licences during 2010. On 12 April the Group announced it has agreed to sell its Italian retail betting and gaming business to an affiliate of Cogetech S.p.A for an expected cash consideration of €5.25 million payable on completion. The sale is subject to Italian competition authority approval.

In other European countries performance was mixed. In Belgium despite a fall of 2% in net revenue, operating profit increased by 20%. Performance in the 82 outlets and eight shops in Spain remains ahead of company expectations but the scale of development of Spanish business is contingent on further regional regulation of sports betting. In Ireland like for like OTC amounts staked at constant currency were down 9% reflecting the continued weakness in the economy.

On E-Gaming net revenue was down 2% during the period with growth in Sportsbook and Bingo offset by weakness in Poker and Casino. Operating profit rose 41% benefitting from the move to Gibraltar. Telephone betting call volumes are declining and operating profits from High Rollers for the period was £8.9 million down from £25 million in 2009.

Last month Ladbrokes announced that it had reached a settlement with HM Revenue and Customs which covers substantially all outstanding items in respect of tax years through to 31 December 2007. The settlement has resulted in the recognition in the 2010 Income Statement, within the tax charge, of a £262 million tax credit in relation to prior years. The finance charge in 2010 has been reduced by £20 million to reflect the interest consequences of the settlement.

Richard Glynn commented, "The economic environment remains challenging and the strength of UK consumer confidence post the election is difficult to gauge. However Group profitability year to date has been broadly in line with expectations. Debt levels have already fallen significantly this year reflecting the continued cash generation of the business and the benefit of the tax settlement." (E-05.14.10)

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