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Friday, 18 January, 2019

Ladbrokes Coral shares fall despite online boost

Jim Mullen: reports continued uncertainty over the FOBT review
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Shares in Ladbrokes Coral fell on Monday after the bookmaker issued a trading update in which growth online made up for a fall in revenue in the company's betting shops.

Group revenue increased by three per cent in the four months to October 29 with digital net revenue up 12 per cent but UK retail net revenue down one per cent.

However, there were markedly differing fortunes for the group's constituents within that digital performance, with growing net revenue by 13 per cent while net revenue was nine per cent behind.

At close of business on Monday the bookmaker's share price had fallen 2.41 per cent to 133.6p.

Chief executive Jim Mullen said: "The four-month period to October 29 represents another period of positive trading performance for the group as well as solid delivery on the key operational and financial targets for the year including the swift integration of people, operations and platforms.

"Our digital performance is strong and the Ladbrokes brand in Australia and the Eurobet brand in Italy continue to post very strong revenue growth.

"In the UK, the Coral and Gala brands also posted very pleasing growth, and we continue to transition our approach to customer acquisition and retention in to focus on improved profit conversion."

Over-the-counter stakes in the company's retail estate were down five per cent but that was an improvement on previous figures thanks to the return of pictures from the tracks involved in The Racing Partnership's (TRP) betting shop service.

The bookmaker estimated that more than 80 per cent of the volume lost due to the lack of content caused by their commercial stand-off earlier in the year had returned while the revenue share basis of the deal signed with TRP would "help protect the long term profitability of the UK retail business".

Mullen added: "In UK retail, performance improved in line with our expectations primarily driven by the return of all horse-racing content to our shops."

The group is likely to be among the most significantly affected by any restrictions to stakes on FOBTs the government may bring in and Mullen did point out the uncertainty this continues to cause in the industry.

He said: "We have existed with the uncertainty caused by the review since we were created and hope that the announcement of a 12-week consultation heralds a positive step to reaching a final outcome. We will take a full part in the consultation."

Last week Ladbrokes Coral were issued with a £2.3 million penalty by the Gambling Commission after two customers gambled around £1.3m of stolen money through their Gala Interactive business.

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Our digital performance is strong and the Ladbrokes brand in Australia and the Eurobet brand in Italy continue to post very strong revenue growth
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