It seems sporting events are becoming more of a gamble for Ladbrokes Coral (LCL) as results in Italy were ‘unusually bad’ in February and March.
The company says the sporting results had an adverse impact on its Eurobet business, although it reported stronger results in April.
Ladbrokes says like-for-like sales for over the counter bets are down 7% between 1 January and 23 April compared to the prior year, while net revenue is 2% lower over the same period.
That news dragged the gambling company's share price 4% lower to 123.2p.
SECTOR WIDE CHALLENGES
In January, its rival William Hill (WMH) reported a £20m gambling hit as punter-friendly horse racing and football results acted as headwinds on its performance.
Ladbrokes' UK retail division is struggling against negative trends challenging high street environment and its focus on multi-channel capabilities. There is also growing pressure to slap limits on fixed odds betting terminals (FOBTs), a profits spinner for betting shops.
Numis analyst Richard Stuber says: ‘With uncertainty surrounding the profitability of Ladbrokes’ UK retail estate not expected to be resolved before autumn, we retain our cautious stance.’
The analyst’s reluctance to change his forecasts makes sense as its UK retail division accounts for 61% of group revenue, with gaming machines (FOBTs) representing more than half of this.
One of the few bright spots in the trading update was an 18% rise in digital net revenue as Ladbrokes’ online growth continued to outperform the market.
