Ladbrokes shrugs off December blues and remains on track to meet profit target

Bookmaking giant Ladbrokes Coral said it expects its annual profit to be in line with its forecast, despite what it described as disappointing sporting results in December.

The FTSE 250-listed company said on Wednesday (18 January) that operating profit for the full year is expected to be within the range of £275m ($339m) – £285m, higher than the £235m profit the group reported last year.

Ladbrokes said the fourth quarter of its financial year saw continued growth in its digital division, where net revenue was 18% higher year-on-year. Despite the poor sporting results in the UK, Ladbrokes.com net revenue rose 17% from the corresponding period last year, while revenue at Coral.co.uk was 13% ahead.

In October, the Competition and Markets Authority gave the green light to the £2.7m deal between Ladbrokes and Coral, and the bookmaker said the newly-merged group has got off to an encouraging start.

Sports gross win margins were around one percentage point behind expectations in both brands, while net revenue in the group's Australian operation surged 45% year-on-year, driven by stakes growth of 57%.

"The last quarter of 2016 was one of significant activity with the completion of the merger, good progress on integration along with the necessary shop disposals and a busy sporting schedule," said group chief executive Jim Mullen.

"While the sporting gods did not look favourably on us in the period, it is pleasing to report that the business continued to perform well and that our full year numbers will be in-line with expectations."

Ladbrokes and Coral had previously agreed to sell a combined 359 stores to rival firms for £55.5m, after earlier this year the regulator had stated the two firms would have to sell approximately 400 stores in order for their merger to go ahead.

Ladbrokes disposal of 322 shops to Betfred, 37 to Stan James and one to Bet21 received the green light by the regulator, meaning the final hurdle before completing the deal has now been cleared.

Ladbrokes operates approximately 2,200 site across Britain and Northern Ireland, while Coral runs 1,850 shops in Britain, making them the second and third-biggest bookmakers in the country respectively.

"We remain confident in our plans for 2017 and on delivering the opportunities identified in the merger," Mullen added.