England’s low-key expectations at Euro 2012 hurt Ladbrokes yesterday after it missed out on the usual surge in patriotic bets seen at major tournaments.
The UK’s second biggest bookmaker said fewer people backed England than would normally be the case, while the progress of fancied teams such as Germany and Spain also hurt margins within its online sportsbook.
Amid strong competition from rivals William Hill and Betfair, Ladbrokes’ advertising featured Italian commentator Tiziano Crudeli and former footballer Chris Kamara during the tournament in Poland and Ukraine.
It had hoped to replicate its performance in the World Cup in 2010 when a high number of draws and low goal-scoring left punters clear losers.
In-play betting through mobile phones is a major growth area for the industry but with the relaunch of its website being delayed Ladbrokes warned half-year profits from digital will be 50 per cent lower than a year earlier.
Shares were 8 per cent down at one stage yesterday, even though a better performance in its 2,000-shop estate kept it on course to meet City expectations for the first-half.
Chief executive Richard Glynn said he was still confident that a two-year £50m investment in digital will return the arm to profits growth in 2013.
Ladbrokes’ plans include expanding into new territories such as Denmark and Spain and turning around its struggling poker division. It has also been heavily involved in marketing its sportsbook, casino and games offer.
Analysts recently said there were signs that its investment was starting to pay off. Digital revenues grew 5.9 per cent in the first quarter of 2012, but profits were set to fall as a result of its investment programme.
“There was always a risk that there would be some delay in the digital turnaround and poor sports results have simply given greater exposure to the issues,” said Peel Hunt analyst Nick Batram in a note. The brokerage has downgraded the stock to ‘hold’ from ‘buy’.
“As stated previously, we anticipated that the phasing of our investment programme, increased marketing expenditure, planned operational losses associated with new international licences and the withdrawal from certain international markets would result in a decline in digital profits year over year,” Ladbrokes said.