Ladbrokes gaining ground in online gambling
LONDON (Reuters) - Ladbrokes, Britain's second-largest bookmaker, expects to see payback this year from a 50 million pound ($77 million investment in an online business that had failed to keep pace with rivals.
While growing numbers of people are gambling via smartphones and tablet computers, Ladbrokes has been hit by delays upgrading its technology. It has lost ground to market leader William Hill in online and faced competition from smaller rivals.
A strong performance from traditional high street betting shops helped Ladbrokes report an 8 percent rise in operating profit to 206 million pounds for 2012, compared with a forecast for 204 million.
Profit from its digital division fell 39 percent to 32 million pounds last year as it spent on marketing and technology, Ladbrokes said on Thursday.
The company also said it was now seeing evidence it was making up for lost time in online, and expected new sports betting and mobile platforms to be launched in the first half of 2013. "We are starting to see some moderately encouraging signs of payback," chief executive Richard Glynn told Reuters.
Growth in digital revenues and earnings should be stronger in the second half of 2013, he said.
HIGH STREET SPENDING
Ladbrokes has benefited from inconsistent performances by the likes of English Premier League soccer clubs Arsenal, Chelsea and Manchester City, who all attract heavy bets and have disappointed fans and punters alike this season.
Revenues in the first six weeks of 2013 rose 7.2 percent in what Ladbrokes said was a promising start to the year.
The company operates more than 2,000 high street shops in Britain and plans to open another 100 this year, adopting a dual retail and online strategy that William Hill has also been pursuing.
The company agreed last month to buy online betting exchange Betdaq for 30 million euros as part of its online expansion.
Although the deal was small, investors welcomed the swift agreement after Ladbrokes had failed in talks with other targets in the sector.
Ladbrokes shares have risen almost 50 percent over the past six months on hopes it can finally come up with a compelling online strategy. They were down 1.9 percent on the day at 226.6 pence at 1120 GMT.
($1 = 0.6535 pound = 0.7479 euro)
(Reporting by Keith Weir; Editing by Dan Lalor)