Ladbrokes points to POC to explain digital profit drop
Ladbrokes said the point-of-consumption (POC) tax regime played a part in a headline digital operating loss of £23.8m in its preliminary full year 2015 financial results.
The loss was in comparison with a £14m headline operating profit for 2014.
As of December 2014, operators offering real-money gaming services to UK customers have been required to pay a 15% remote gaming duty on profits, regardless of where they are based.
Ladbrokes said: “In digital, the POC tax, the increased H2 marketing investment required to implement our strategy and the loss we recorded from HVCs in Q1 contributed to a significant decline in profitability.”
Last year was a year of change for Ladbrokes, as former William Hill COO Jim Mullen replaced Richard Glynn as CEO in April and John Kelly filled the position of chairman in December, which had been vacated by Peter Erskine.
In between those events occurring was an announcement in July that Ladbrokes plans to merge with fellow operator Gala Coral.
In other figures, headline group operating profit went down 36% to £80.6m, while a statutory operating loss of £15.4m was reported, in comparison with statutory operating profit of £66.2m.
Profit before tax dropped 47% to £52.5m in the headline band and a loss before tax in the statutory band of £43.2m was reported, compared to a positive £37.7m.
Growth was reported, in terms of headline net revenue, for UK retail and overall digital, with the former increasing 2% to £827.4m and the latter ascending 13% to £242.8m.
Ladbrokes also said the Gala Coral merger, which is currently under review by the Competition and Markets Authority, is “on track”.
The operator expects to see the CMA’s preliminary findings in late April.
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