London-headquartered gambling operator Ladbrokes PLC has had quite important and eventful year. The company signed several important deals, appointed both new CEO and Chairman, launched new products, and last but not least, reached an agreement for its merger with rival Gala Coral for the creation of what would be UK’s biggest chain of betting shops.
In January, Sportium, Ladbrokes’ joint venture with fellow gambling company Cirsa, launched a regulated gambling site in Mexico, with a number of sports betting and online casino and bingo options being among the products offered on it.
A month later, the UK-based gambling operator announced the signing of an important contract for the provision of more than 2,000 self-service betting terminals across its chain of betting shops. Under the terms of the deal, signed with Austrian manufacturer of SSBTs Best Gaming Technology, Ladbrokes installed at least one terminal in every shop.
Prior to adding Best Gaming Technology devices across its retail estate, Ladbrokes had featured 1,730 SSBTs in the UK. The deal with the Austrian manufacturer turned the gambling operator into the biggest provider of gaming machines of this kind in the UK.
In March, Labrokes appointed Jim Mullen as its new Chief Executive Officer. Mr. Mullen assumed post on April 1, replacing former CEO Richard Glynn. Prior to his appointment, the executive had taken the post of Managing Director of the company’s Digital division.
In May, it became clear that Labrokes’ Chairman, Peter Erskine, was to step down from his post. Mr. Erskine officially left his position on December 3 to be replaced by John Kelly, formerly a Senior Non-Executive Director at the gambling company.
It was in May again when Ladbrokes announced that it had signed a two-year sponsorship agreement with the Scottish Professional Football League. The gambling operator became SPFL’s title sponsor as of the beginning Season 2015/16. The sponsorship includes all rights across Scotland’s four leagues and 42 football clubs.
In June, Ladbrokes confirmed that there were ongoing discussions regarding the potential merger of the gambling operator with rival Gala Coral’s Online, Coral Retail, and Eurobet Retail businesses. Talks were at a relatively early stage at that time but quickly progressed and the two gambling companies announced in July that a merger would indeed occur, if it gets the necessary approvals.
In July, Ladbrokes launched a Playtech-developed digital platform in a bid to combine its sportsbook product offering into a single work-stream, available to desktop, mobile, and other devices. The announcement about the new platform came as part of the gambling operator’s plan to provide customers with the quickest and easiest experience across key digital devices and thus establish itself not only as leader in the provision of land-based operations but also of online ones.
On July 24, 2015, Mr. Mullen announced a new strategy for the growth of “recreational scale” across UK Retail, Ladbrokes’ online business, and the company’s operations in Australia. The executive explained that the growth would be driven by increased brand and direct marketing expenditure, through the provision of “focused value propositions” and through the constant introduction of new products and services, including multi-channel ones.
In September, Ian Bull, Chief Financial Officer of Ladbrokes, announced that he is to step down from his post in February 2016. The news about the executive’s departure came after it became clear that Gala Coral Chief Financial Officer Paul Bowtell would become Finance Director for the new £2.3-billion combined entity, which is to be the result from the merger between the two major gambling operators.
In November, the proposed merger was approved by Ladbrokes shareholders at an extraordinary meeting. The transaction is also subject to regulatory approval. If eventually completed, the merger would secure Ladbrokes with a 51.75% stake in the combined business.
In December, the gambling operator announced the appointment of John Kelly as Chairman of the Board, following Peter Erskine’s departure. Mr. Kelly would also be Chairman of Ladbrokes Coral plc. In addition, Mark Pain was appointed as a Non-Executive Director and Chair of Ladbrokes’ Audit Committee.
As for the operator’s financial performance, it saw its net revenue drop 0.7% in the nine months ended September 30. The slight decline was mainly attributed to the lack of a major football tournament in 2015. In fact, excluding revenue from the 2014 FIFA World Cup, the company’s overall net revenue for the first nine months of the year increased 2% year-on-year.
During the period in review, Group EBIT dropped to £14.3 million. Ladbrokes said that the decrease was mainly due to the newly introduced Point of Consumption tax, the increased Machine Games Duty rate, and lower comparative margins.
It all shows that the completion of the £2.3-billion merger with Gala Coral would be of the utmost importance to Ladbrokes in the first moths of 2016. The new business is expected to be formed sometime in the first half of the year, if the two gambling operators receive the necessary regulatory approvals. It is still unclear whether the move would be beneficial to both companies. Yet, it would result in the creation of the largest network of land-based betting shops across the UK and is expected to also create potential for faster growth of the new entity’s online business.
