Ladbrokes released a robust set of Q4 trading figures.
For the full year:
Net revenue up 4%
European Retail +14%
Companies: Ladbrokes Coral Group
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UK papers reporting over the weekend that newly appointed Secretary of State to the Department of Culture, Media and Sport (DCMS) is in favour of a £2 maximum stake on category B2 machines in betting shops.. Papers referencing “overwhelming response has persuaded them to reduce the maximum stake to £2.” The consultation on B2 stakes will conclude tomorrow 23 January 2018 and where we weren’t expecting a final decision on the matter for c. 6 – 8 weeks after the end of the consultation period. It is possible the final decision could be brought forward sooner after the conclusion of the consultation period tomorrow.
Companies: GVC LCL WMH PTEC FLTR
Sportsbook margins in October and November were healthy for bookmakers with no run of results favouring punters. We expect that December 2017 would have been another healthy month for bookmakers, and as a result we should expect to see strong sports margin generation for Q4. Furthermore, the results will look particularly good, YoY, compared to a 4Q16 where results favoured punters and bookmaker sports margins were lower as a result.
The merger creates one of the world's largest gambling companies.
Companies: Ladbrokes Coral GroupGVC
Shares in both companies have jumped with news they are in "detailed" takeover talks which value Ladbrokes Coral at up to £3.9bn.
Ladbrokes released a quite decent set of top-line figures for the 4-month period to 29 October.
Revenue up 3%
Digital up 12%
Lfl UK Retail down 1%
European Retail up 17%
Following its July trading update, Ladbrokes Coral today released its first half results.
On a pro forma basis:
Revenue up 1%, to £1,204.2m
EBITDA broadly stable at £211m
2p interim dividend (+1p), 4p FY guidance (AV: 4.5p)
Synergies guidance upgraded
As stated in July, further IT cost savings and the upward adjustment of horse racing gross win margins led the company to upgrade 2019 synergies for a second time, from £100m to £150m (o/w c.£45m in 2017 and c.£130m in 2018), with costs to be achieved of between £165m and £173m. This represents 2.3x the initial planned synergies.
Ladbrokes released a rather mixed H1 trading update, marked by deteriorating trends in the UK high streets, continued online growth and revised merger synergies.
Net revenue up 1% (-1% cc)
Operating profit guidance £153.3-158.3m
Digital net revenue up 17%
UK Retail down 6%
European Retail down 1%
Ladbrokes released a fairly disappointing set of results for the 113 day period from Sunday 1 January 2017 to Sunday 23 April 2017, marked by lower gross win margins at Eurobet and a disappointing UK Retail, although both offset by solid growth in Digital.
On a pro forma basis, excluding divested shops;
Revenue up by 5% (+2%cc)
UK Retail down by 2%
Digital up by 22% (+18%cc)
European Retail down by 3% (-15%cc)
Management confirmed that the triennial review was likely to be postponed to later this year, probably during Q3, as the UK government is currently concentrating on the June General Election. However, the implementation of the new point of consumption tax on gaming free bets is unlikely to be postponed.
Following its January trading update, Ladbrokes Coral released its full-year results.
For the full year, pro forma group revenue reached £2,352m, up 11% yoy, pro forma underlying EBITDA reached £380.7m, up 14% yoy while operating profit reached £264.3m. Once adjusted for exceptional items linked to the merger, reported operating profit reached £121m, 3.5% above the £117m guidance.
During Q4, pro forma group revenue was up 6%, translating a 25% (+19%cc) increase in Digital’s net revenue and a 29% increase (+7%cc) in European retail, partly offset by a 4% decline in UK Retail.
The board proposed a 3p total dividend, in line with expectations and reiterated the previous distribution policy.
At 31 December 2016, net debt stood at £1,089.5m, or 2.86x pro forma EBITDA, mostly reflecting the £834m new debt issued to repay Coral’s debt.
Management revised the cost synergy guidance from £65m to £100m, of which £35m should be delivered by 2017, £90m by 2018 and £100m by 2019.
Management also described a mixed ytd performance (to 19 March 2017), translating a strong month of January for sports, offset by customer-friendly results in February and early March, before a very strong Cheltenham Festival. Additionally, European Retail suffered from customer-friendly football results, with net revenue 26% behind last year driven by a 44% fall in Eurobet Retail’s net revenue despite a 20% increase in sports stakes. However, the Digital division performed strongly as Digital’s net revenue was 20% ahead of last year’s with sportsbook’s net revenue 34% ahead and gaming’s 8% ahead. Overall, the group’s revenue was up 2%, or 4% excluding the exceptional impact from the lower margins in Italy.
Ladbrokes Coral has released its Q4 trading update.
UK Retail’s net revenue was down 4% yoy, mostly translating lower OTC net revenue, down 11% yoy on lower lfl stakes (-5% yoy) and the gross win margin (2pp below expectations, at 16.5%).
Digital’s net revenue was up 18%, with Ladbrokes.com up 17% and Coral.co.uk up 13%.
The Australian business was up 45% at cc, supported by a 57% increase in stakes.
Management expects the full-year pro forma group EBIT to be within the £275-285m range (at least 17% higher than 2015 pro forma), with Ladbrokes standalone EBIT expected at c.£101m and Coral’s at c.£179m (vs £80.6m and c.£154m in 2015, respectively), while 2016 reported EBIT for the group should be c.£117m, in line with AlphaValue’s expectations (£116m).
The company also confirmed that the merger synergies were well on track and that FY17 targets should be reached.
Final historic pro forma numbers will be issued in February 2017 and the final results are due on 28 March 2017.
As expected, Ladbrokes and Gala Coral have completed their merger. The CMA green lights were given after c.322 betting offices had been sold, as required by the competition authorities.
To finance the merger, 866,518,803 consideration shares were issued and were added to the 29,174,406 shares issued to pay Playtech a £40m payment related to the Marketing Service Agreement. These 895,693,209 shares will be added to the 1,050,455,117 existing shares.
The following changes to the board of directors take effect on Completion:
Carl Leaver has become Executive Deputy Chairman
Paul Bowtell has become Chief Financial Officer
Rob Templeman has become a Non-Executive Director
Gala Coral released a positive albeit concise Q4 trading update.
Total net revenue was up 8.9%.
Retail revenue was up 0.3%
Eurobet Retail was up 31.2%
Online activities were up 23.7%
Ladbrokes released its Q3 trading update.
Total group net revenue was up by 12.1%, despite a relatively low performance in the UK retail activities, which were only up 1.9% despite an increase in the gross win margin. The two biggest growth drivers were Digital and Australia, with net revenues up 48.2% and 89.6%, respectively. Finally, European retail, excluding the UK, was up 11.3% (+1.1% lfl).
The company said it remained confident of delivering full-year results in line with its expectations.
As regards the merger, the company did not make any new comment, saying it was waiting for the CMA approval, following the announcement of the disposal of 359 shops made on Monday, 18 October.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Ladbrokes Coral Group.
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Companies: Studio Retail Group
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Companies: Boohoo Group Plc
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Companies: Halfords Group
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Companies: AFC AFC AFC
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Companies: DWF Group
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Companies: Revolution Bars Group
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Companies: Hollywood Bowl Ten Entertainment Group
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Companies: Quiz Plc
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Companies: N Brown Group