The merged Ladbrokes Coral reported a drop of 6% in UK retail revenue for the first half of the year this morning. I part this was due to the recently resolved dispute between the firm and Arena Racing Company over picture rights into their retail estate of shops.
The trading statement reported that over the counter stakes were 7% below last year. Once the pictures dispute and what the statement referred to as"structural improvement in the green listed bookmaker Ladbrokes Retail horse racing gross win margin" were adjusted for, that figure was reduced to 5%.
CEO Jim Mullen said: "In UK Retail, a key management focus has been on addressing some areas of ongoing inflationary pressure on the cost base and on improving gross win margins.
"Examples include the planned and considered commercial decisions taken on horse racing media costs and horse racing gross win margin. Whilst these have had a negative impact on stakes, they have been profit positive and helped mitigate some of the impact of underlying run rates. "
He added: "We are pleased to have resumed showing pictures from all UK racecourses following the agreement of a profit-share deal with The Racing Partnership reported last week."
The report also gave an update on the advanced stages of the merger between two of the larger betting companies on the UK retail scene. “Synergy guidance”, the amount expected to be saved by the company as a result of the merger, was increased to £150 million by 2019. That is more than double the original estimate.
Mullen said: "On integration, we have successfully migrated our UK Digital brands to a single platform and completed the consolidation of our head office team. The further synergies identified re-emphasise the merits of the merger and the potential of the enlarged Group, with the additional savings delivered in 2017 offsetting the impact of current UK Retail run rates. We therefore remain in line with our expectations for the full year."
The report concluded that operating profit for the group as a whole over the year is still expected to be in the range of £153.3 million to £158.3 million.