British bookmaker Ladbrokes reported a decline in first-half pre-tax profit and cut its dividend today as it warned that trading had worsened since May and economic conditions remained challenging.
Ladbrokes, which has 2,100 betting shops in Britain and 208 in Ireland, reported an underlying pre-tax profit of £131.3m sterling, compared with £136.6m last year.
Ladbrokes said that the environment in Ireland is particularly challenging and 36 shops have closed across the industry so far this year.
Five of its 'unprofitable' shops will close in the second half of the year, it added.
The firm said that operating profits at the Irish shops slumped 65% to £5.4m from £15.5m the same time last year, while revenues declined by over 10% to £42.3 from £47.2.
It said that overall gross win in Ireland was down 4.2% at £45.6m with the benefit of the Eastwood acquisition and favourable exchange rates more than offset by a much lower gross win margin.
Ladbrokes said that the Department of Justice decision in April to postpone the doubling of turnover tax will save the business about €3m of an additional tax burden this year.
Ladbrokes CEO Chris Bell said trading conditions had worsened since May but the company was still aiming to meet full-year expectations.
Rival William Hill warned on full-year profits on Tuesday, saying trading had been hit by a drop in the number of customers at weekends and a run of unfavourable results.
Ladbrokes said it was cutting its dividend by 31% to 3.5 pence given the results to date and uncertain outlook.
The company also said it would follow William Hill in transferring its online sportsbook operations to Gibraltar but would keep its telephone betting call centre in Britain.
Bell said the company expected to save in excess of £7m a annum from the move. Ladbrokes is looking to sell its Italian retail business and Bell said the company has received expressions of interest. Analysts say the book value of the business is about £50m.
