Ladbrokes owner sees profits enhance despite betting crackdown

9 October 2019

GVC, the company that owns Ladbrokes, says it expects its earnings to be bigger than anticipated in spite of the federal government's clampdown on betting.

The firm still expects to close 900 shops over two years because of the maximum stake on fixed-odds betting terminals (FOBTs) being cut to ₤ 2.

But while using FOBTs has fallen, in the third quarter more bets were being placed in-store.

The group, which also owns Coral, said online betting is likewise up by 12%.

In a 3rd quarter trading upgrade, it updated its profits assistance for the full year to in between ₤ 670-₤ 680m, from ₤ 650-₤ 670m.

Kenneth Alexander, GVC's president, said: "I am thrilled that the group's monetary performance has enabled us to upgrade our full-year profits before interest and tax expectations again.

"Online momentum stays strong across all major territories, with net gaming income up 12% in the quarter in spite of the previous duration including part of the World Cup."

In August, the company revealed strategies to shut 900 shops - putting up to 5,000 jobs at danger - due to the fact that of the cut in FOBTs maximum stakes from ₤ 100.

There were 3,500 Ladbrokes and Coral shops at the start of the year, and some 198 have actually already shut, with the rest set up for closure by April 2021.

Rival William Hill has stated it will close 700 shops as a result of the regulatory clampdown. While GVC said revenue in the stores is down 18%, it still ahead of expectations.

GVC showed that consumers were finding other methods to gamble, as while revenues from makers - consisting of FOBTs - were down 36% in the quarter, there was 7% increase in betting in stores.

But the greatest growth was in online gaming, boosted by a 16% increase in online sport betting incomes. GVC shares were up almost 4% in early trading.