International edition
September 17, 2021

As digital profits take hit

Ladbrokes to delay website launch until the end of the year

(UK).- Ladbrokes will further delay the launch of its revamped website until the end of the year amid fears it is heading for its lowest digital profits since 2004. The CEO, Richard Glynn, insists the technology strategy has only been deferred and not “derailed”.


adbrokes had been hoping to transfer all customers over to the new website in time for the Euro 2012 football tournament but was forced to postpone after unsatisfactory feedback about certain functions. Britain’s second biggest bookie will update the City on its embattled technology strategy on Thursday, after it issued a shock profit warning last month on its digital division.

The creation of a vast data warehouse to support the new online business has also been beset by problems after it proved more complicated than expected.

Richard Glynn, the chief executive, will say this week that Ladbrokes won’t be able to deliver its long-awaited technology strategy until the year-end, missing crucial events such as the Olympics and several months of the new football season.

The delays will cut half-year digital profits to about 50pc of the £31m achieved during the same period last year.

Ladbrokes has been lagging rivals, in particular market leader William Hill, for several years.  It pursued takeover talks with 888 Holdings and Sportingbet (LSE: SBT.L - news) last year and has recently been linked to Betdaq, the betting exchange owned by Irish billionaire Dermot Desmond.

But Mr Glynn persuaded investors that Ladbrokes was better off pursuing an organic growth strategy and has ploughed £50m into upping the group’s presence online. However, more than a year since the strategy was unveiled in February 2011, some analysts say that shareholders are yet to see the fruits of that labour.

Panmure Gordon analyst Simon French believes digital profits for the full year will reach an eight-year low of £36m.

“If you look at the size of the online market, it has grown fourfold and yet Ladbrokes’ digital profits will be the lowest this year than they have been since 2004,” Mr French said.

“The digital division of Ladbrokes has become a definitive issue for the business and management.

“They have been very successful in narrowing and extending the [gaming] machine profitability gap between themselves and William Hill, but the over-the-counter business and more significantly the online operations have continued to lag dramatically.”

A good performance from Ladbrokes’ betting shops is expected to flatter half-year results this week, with consensus pointing to a near 6pc rise in operating profit, excluding “high-rollers”, to £103.4m.

Even so, Mr Glynn and his management team have been warned their credibility is at an “all-time low”.

On Friday, William Hill added to the pressure on Mr Glynn when it reported a 23pc jump in online operating profits to £68.9m.

David Jennings, analyst at Davy, warned that with every passing day, the odds on Ladbrokes’ ability to close the gap on the likes of William Hill, Paddy Power and bet365 are widening.

“The problem on the online side is Ladbrokes are chasing a moving target and that is not an easy race to win,” he said.

Ladbrokes’ recent problems have been exacerbated by the departure of its former head of trading, Jon Thompson, who was sacked for alleged misconduct.

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