Ladbrokes counts cost of IT delays
Product director Richard Ames, who was responsible for IT and trading, stepped down this week in a move reportedly linked to the botched digital strategy that has left it trailing big rival William Hill.
The wider group, which has 2,150 shops in the UK, saw operating profits rise 11% to £106.9 million and revenues improve 8% to £529 million in the period, boosted by strong performances from the Grand National and Cheltenham horse racing festival.
The digital division, which covers betting and gaming online and on mobile phones, has been beset by delays in bringing in new IT systems, trading platforms and new products.
Operating costs still rose 30% to £72.8 million, which was driven by increased marketing spend. The group admitted the slide in digital profit was greater than expected and its priority was to bring in the new technology required.
Its new mobile platform will begin early-stage testing in the first quarter of 2013 and the group expects the new technology to provide "significant benefits" throughout 2013.
Chief executive Richard Glynn said: "We remain committed to our digital strategy of building a more competitive offer through a combination of ongoing investments to enhance our marketing, product and technology. The delivery of several key technology developments is our focus in the second half of the year."
The UK retail division saw net revenues increase by 9.7%, driven by the popularity of gaming machines, which saw a 20% increase in the amount staked to £5.9 billion in the period. The group said further growth was offset by the number of UK and Irish horseracing cancellations, which doubled to 60 in the period due to the dismal weather.
Shares in the bookmaker were ahead 2% as Simon French, analyst at Panmure Gordon, said the overall group results were ahead of expectations.