Gambling operator Ladbrokes Coral posted its first post-merger annual financial report after Ladbrokes and Coral combined their operations in November 2016. Pro forma revenue amounted to £2.4 billion for the year ended December 31, 2016, reflecting an increase of 11% from 2015.
Group EBITDA totaled £380.7 million, up 14% year-on-year. On a pro forma basis, the combined entity generated operating profit of £264.3 million. However, reported basis figures show that the gambling operator saw operating loss slide to £202.4 million from loss of £18.7 million reported for 2015. The considerable decrease was mainly attributed to merger and integration costs that occurred over the course of the year. Ladbrokes Coral pointed out that said costs were one-off and no such expenses would affect the combined entity’s profitability in 2017 and beyond.
UK Retail was the company’s highest grossing division in 2016. Pro forma revenue from high street betting shops amounted to £1.4 billion last year, up 2% from 2016. Gaming machines accounted for the larger portion of the bulk. These generated a total of £802.4 million in 2016.
Revenue from European Retail totaled £212 million during the reviewed 12 months. Sports betting operations generated the biggest part of the aforementioned figure. Revenue from those stood at £157.1 million at the end of the year. Revenue from virtual betting content amounted to £46.8 million in 2016. The rest of the bulk – a total of £8.1 million, came from other retail operations in locations around Europe.
Ladbrokes Coral’s European Retail division includes the Eurobet brand in Italy, which generated £105.6 million, Ladbrokes Belgium (£67.7 million), Ladbrokes Ireland, and Sportium (the company’s joint venture with Spanish operator Cirsa).
Digital operations generated revenue of £666.2 million in 2016. Online sports betting offering contributed £310 million to the whole, while revenue from online gaming amounted to £356.2 million. Ladbrokes Coral’s Digital division comprises online gambling brands with footprint in the UK, Australia, Italy, Belgium, Spain, and other regulated jurisdictions.
The company generally attributed the growth in pro forma revenue to the heavy investment in multi-channel offering and the increased efforts to achieve better brand awareness among existing and potential customers.
Ladbrokes Coral and the FOBTs Crackdown
The newly merged gambling operator may be the one to suffer the most from a looming clampdown on the highly controversial fixed odds betting terminals. The merger deal resulted in the creation of Britain’s largest operator of high street betting shops. Ladbrokes Coral currently owns more than 3,500 such properties across the UK and those feature thousands of betting machines.
FOBTs have been on British MPs’ radar screens for several years now due to their high level of appeal to betting customers. The machines allowing bettors to place a maximum stake of £100 every 20 seconds has turned into a big bone of contention between operators and gambling opponents. The latter may eventually succeed in its efforts to purge the gambling society of what has often been referred to as a risky habit of playing on the contentious gaming devices.
A triennial probe into the country’s gambling industry and FOBTs, in particular, is expected to be completed within the next several weeks. Following massive anti-gambling lobbyism from the past several months, it is believed that new, stricter, regulations would be introduced in relation to the way the gaming machines are operated and promoted to customers.
