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Ladbrokes profits halve as digital transformation continues

Matthew Finnegan | Aug. 14, 2014
Ladbrokes has seen a sharp downturn in profit as its digital transformation affects its bottom line.

Ladbrokes has seen a sharp downturn in profit as its digital transformation affects its bottom line.

Pre-tax profits fell 49.7 percent in its half-year results as the company focused on improving back office IT systems to support its online and mobile betting strategy.

"We now have the products, the platforms, the people and the brand in place to deliver," said CEO Richard Glynn. "Ladbrokes today is a far stronger company and well positioned for growth."

Ladbrokes spent millions last year as it implemented Playtech's IMS back office system, ahead of the launch of a single wallet across all betting and gaming products that enabled the business to deliver more personalised offers to customers.

However, the digital strategy affected Ladbrokes' bottom line, with the "operational disruption" of moving to new back office systems blamed for an 18.3 percent fall in gaming revenue to £37.5 million.

Glynn issued a warning earlier this year that profits would be lower in the first half of 2014 as the transition took place, but attempted to reassure shareholders that progress would be made later in the year.

There were encouraging signs for the firm, as digital revenues grew to £105 million over the period from £90.8 million in the same period last year.

Mobile was highlighted as the main driver of growth within the digital business. Investments in a new mobile sportsbook product, developed in partnership with Chelsea Apps Factory, began to pay off, accounting for 46 percent of sportsbook stakes, compared to 36 percent the previous year, and increased to 63 percent during the World Cup.

 

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