Ladbrokes (LSE: LAD), Britain’s second-largest bookmaker, today reported some disappointing results for the first half of its year (ending 30 June). Shares were down about 3.5% in early morning trading.
Ladbrokes reported that its operating profits were down a full 20% — to £85.7m — in the first six months of the year, due mainly to a slowdown in its UK high=street betting shops.
It said its UK retail business was down 19.8%, hit by higher costs, increased taxation and a slowdown from gaming machines, which had been a growth driver for Ladbrokes in recent years.
Richard Glynn, Ladbrokes chief executive, commented on the lacklustre first half:
“Following a strong performance in 2012, we have continued to make good operational progress against our strategy which, disappointingly, is not reflected in our first half financial performance.”
The company also reported one-costs of £21.8m related to its new partnership with online software developer Playtech, which it hopes will be a key part in Ladbrokes’ international expansion efforts.
For investors following Ladbrokes for the dividend, the company said it will maintain its interim dividend 4.3 pence per share to be paid on 31 October.
Investors may be able to take some solace in the fact that these results weren’t surprising to Ladbrokes. The company, which is often overshadowed by its biggest competitor William Hill, warned investors in April that it expected operating profit to fall this year after a poor performance from horse racing and online gaming in the first quarter.
Perhaps it’s no surprise, then, that Ladbrokes is not one of the top UK shares featured in our latest investing bulletin, “5 Shares to Retire On.”
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> Jill does not own shares of any company mentioned.
