Ladbrokes plc today announced preliminary results for the year ended 31 December 2010. Group net revenue from continuing operations excluding High Rollers was up 1.3% to £976.6 million and Group operating profit, before tax, finance costs and non-trading items as well as excluding High Rollers, rose 20.1% to £202.3 million. However High Roller revenue saw a sharp decline and fell from £66.9 million in 2009 to £5 million, a 92.5% drop.

Richard Glynn, Chief Executive, commented: “Our business is going through a process of significant change. We have made good progress to date and our improved performance reflects the decisive management action taken in 2010.” Last year the company adopted a new management structure and strengthened its team. Glynn continued, “Group operating profit is up 20.1%, with double digit profit growth across all trading segments of the business. Our machine performance continues to improve with gross win per terminal per week up 10.2% in the second half of 2010 versus 2.8% in the first half. This reflects our increased operational focus and provides a strong platform for the rollout of the new Global Draw machines, which we expect to complete during the first half of 2011.”

As part of its strategic review last August, Ladbrokes decided to build on its retail strength. In 2010 the company optimised its estate by opening 40 new shops, closing 30 and relocating 25. Shop openings are financially compelling and on average pay back within three years. Ladbrokes is planning to open another 50 in 2011 with 20 scheduled closures. Glynn says the company will look to offer its customers innovative products and promotions, utilising the data obtained from the OddsOn! programme. Nick Rust has moved from Gala Coral to lead the division.

Ladbrokes’ Digital division has been reorganised under Gary McIlraith. Operating costs in 2011 are scheduled to increase by an expected £13 million to strengthen technology, trading and product capabilities. Sportsbook will remain a key focus for Ladbrokes and is an efficient recruitment vehicle for other products, particularly Casino. The launch of a new and exciting range of smartphone apps during 2010 has significantly increased the number of active customers and revenue in Mobile. The company sees Mobile as a strong growth opportunity and therefore an area for further investment going forward.

The Group entered 2011 on the back of much improved results in 2010, a significantly strengthened balance sheet and a revitalised management team. A clear strategy to become an e-enabled, international betting and gaming business has been developed. This includes a particular focus on improving technology capabilities across all distribution channels, re-energising the brand with the customer as the focus and drawing on the energy and passion of Ladbrokes’ people.

In the period from 1 January to 15 February, Group amounts staked (excluding High Rollers) were up by 14.1%. Net revenue (excluding High Rollers) was up 0.1% driven by lower gross win margin percentages, notably in horses and football. In UK Retail, average gross win per machine per week was up 17.6%. The rollout of the new Global Draw machines is underway and will be completed during the first half of 2011. Since the start of the year, business from High Rollers has contributed a further £4.6 million of operating profit.

Richard Glynn stated, “Whilst we remain very mindful of the uncertain consumer outlook in the UK and the absence of a major football tournament in 2011, the Board looks forward with confidence to executing its new strategy.” (E-02.17.11)

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