Ladbrokes could lose a fifth of annual revenue depending on FOBT verdict
We are only two weeks into the 12-week consultation period that will determine the future of all UK betting shops, and bookmakers are already indicating how much they stand to lose if the government's reduction in FOBT stakes results in the worst case scenario.
In an update to investors, Ladbrokes has not only disclosed its recent trading, but it has also indicated how much revenue there is to be lost through a cut to FOBT stakes.
The company posted a 3% year-on-year increase in group net revenue in the four months to 29 October, reversing the 2% decrease seen in the second quarter of 2017.
Ladbrokes’ digital sector led the way, lifting net sales by 12%, all due to an 18% increase in sportsbook net revenue and a 6% increase in online gaming.
Pro-forma revenue for Ladbrokes plus the recently merged Coral was £2.3bn, and August’s half-year results suggested this might be nearer £2.4bn this year.
The Financial Times has suggested that because of these results, it is able to estimate how much Ladbrokes stands to lose if the government’s consultation passes the stake reduction.
It has concluded the company would stand to lose just under a fifth of its annual revenues. It stated: “Analysts at Barclays forecast that a cut to £50 would have a negligible impact, a cut to £25 would cut £84m in revenues, but a cut to £2 would result in Ladbrokes Coral losing £437m.”
A Ladbrokes spokesperson commented: “Ladbrokes Coral reached its first birthday on 1st November, the day after the further consultation on the Triennial Review was announced.
“We have existed with the uncertainty caused by the review since we were created and hope that the announcement of a 12 week consultation heralds a positive step to reaching a final outcome. We will take a full part in the consultation.”
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