Ladbrokes retail slowdown steadies as TV race dispute is resolved
Coral has stemmed the slowdown suffered at its retail business since the start of the year after the resolution of an industry spat meant it could show key horse races in its betting shops again.
Management had been in a dispute over media rights with The Racing Partnership, which covers 15 courses owned by Arena Racing Company, the UK’s largest racecourse operator, and seven independent tracks. The Ladbrokes retail estate had been suffering from the lack of pictures from the 22 racecourses after it refused to pay for rights to show the races. While this meant Ladbrokes saved money, it began to have a detrimental impact on revenues in its store estate.
In 2017 until Oct 29, the amount staked over the counter at its shops has dropped 8pc on the prior year but in its trading update yesterday, the drop for the four months to the same date was only down 5pc, showing a slowdown in the decline. Chief executive Jim Mul- len reckoned about 80pc of the customers it had lost due to not having The Racing Partnership’s pictures had returned.
Mr Mullen also said that before the merger of Ladbrokes and Coral, the former had been giving up some of its margin as part of a marketing investment to retain customers but that this had now ceased, meaning its retail estate was performing more profitably.
Its online business continued apace though, with net revenue up 12pc for the four months to Oct 29 even though there was not a major football tournament in the period compared to last year. Within its digital arm, though, Ladbrokes.com stuttered with net revenue 9pc behind the same period in 2016. Mr Mullen said a major reason for this was the merging of the Ladbrokes and Coral sites on to one technology platform, which meant the site was not releasing the number of new games it usually would to entice customers.
But Mr Mullen said such a drop off had been predicted and reiterated that the merger of Ladbrokes and Coral would now see annual cost savings of £150m a year by 2019 – double the initial estimate. Elsewhere, the group’s Australian and Italian businesses performed well with sports stakes up 41pc and 35pc respectively.
The triennial review was released last month, with proposals to cut the maximum stake wagered on fixed odds machines to as low as £2, from £100 at present. The report is in the middle of a 12-week consultation period.
“We have existed with the uncertainty caused by the review since we were created and hope that the consultation heralds a positive step,” Mr Mullen said. Ladbrokes Coral shares closed down 2.4pc at 133.6p.