Britain's second-biggest bookmaker Ladbrokes has reported a decline in revenue at its online business as it struggled to catch up with rivals despite a big investment programme. The online drop overshadowed better than expected full-year results.
Ladbrokes, which pulled out of talks to buy online gambling businesses 888 and Sportingbet during the last year, has embarked on a £50m two-year investment programme to improve the performance of its internet business, which has lagged that of rival William Hill.
Net revenue at its digital division still fell by 3.5%, however. In contrast, William Hill's online net revenue rose by 23% in the first half of last year. Unlisted Bet365 has also performed well.
Ladbrokes said punter-friendly sports results, including a run of favourites winning in Premier League soccer and poor demand for poker masked underlying growth.
Ladbrokes Chief Executive Richard Glynn said the company was investing to improve its technology and expand its range of products.
Customer sign-ups in the fourth quarter rose 77%, customers actively betting increased 24% and amounts being staked rose 22%.
"It's the result at the end of the match that counts," Glynn told reporters on a conference call. "With this match I think we're still in the first half. There's an awful lot to play for. You can see the momentum coming through."
Ladbrokes pulled out of talks with 888 and Sportingbet as differences over valuation and regulatory hurdles proved insurmountable.
Ladbrokes, which has around 2,100 shops in Britain, said its 2011 operating profit fell by 0.4% to £193.5m, ahead of the average forecast of £187m. The company had been expected to report a profit decline as 2010 earnings were boosted by the soccer World Cup.
Ladbrokes said it took in 7.5% more at its Irish betting shops last year despite a tough economy and extremely competitive market in the Republic of Ireland in particular.
At the end of 2011, Ladbrokes had 213 shops in the Republic and 79 in the North.
Total gross win - the difference between total bets taken and total winnings for punters - at all Irish shops increased by 1.9% to £81.4m. The gross win margin of 12.7% was 0.8 percentage points behind 2010, affected particularly by results at the Cheltenham horse racing festival early in the year.