UPDATE 1-Ladbrokes profit up on retail growth, online revival

Thu Apr 19, 2012 2:40am EDT

* Q1 op profit up 3.9 pct to 50.4 mln stg

* UK retail sales up 9 pct

* Says digital unit improving

LONDON, April 19 (Reuters) - Britain's second-biggest bookmaker Ladbrokes posted a 3.9 percent rise in first-quarter profit, boosted by strong growth at its retail operations, and said its online business was showing signs of improvement.

Ladbrokes, which has around 2,100 shops in Britain, on Thursday reported an operating profit of 50.4 million pounds ($80.8 million) in the three months to the end of March on revenues 8.9 percent higher.

The company said net revenues at its British retail businesses grew 9 percent, helped in part, by favourable results at the recent Cheltenham horse racing festival.

Ladbrokes, which pulled out of talks to buy online gambling businesses 888 and Sportingbet during the last year, said net revenue at its digital division grew 5.9 percent in the quarter, boosted by good growth in online sports betting.

Profit at the digital unit fell largely due to a 50 million pounds two-year investment programme the company has embarked on to improve the performance of its internet business, which has lagged that of rival William Hill..

"We are continuing to deliver on our trading and digital milestones with further developments expected in the coming months," Chief Executive Richard Glynn said.

"We are confident of delivering digital profit growth during the second half of the year as the benefits from our investments converge."

Earlier this year Ladbrokes reported a less than expected 0.4 percent fall in 2011 operating profit.

Shares in Ladbrokes, which have risen a fifth in the last three months, closed at 162.8 pence on Wednesday, valuing the company at around 1.5 billion pounds.

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