Business Bulletin 2 Apr 2017
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Mullen hails performance at Ladbrokes Coral
Ladbrokes Coral chief executive Jim Mullen hailed a strong performance by the newly merged company, who posted their preliminary results for 2016 last week.
The costs of the merger meant the company made an operating loss of £202.4 million in 2016.
However, on a pro forma basis, which assumes the merger had taken place by the start of 2016, operating profit was up 22 per cent to £264.3m, with revenues up 11 per cent to £2.35 billion.
“This is a very successful start for the Ladbrokes Coral Group,” Mullen said.
“Both Ladbrokes and Coral entered the merger in November with good momentum, and together delivered a strong full-year financial performance.”
He added: “The merger was the start of a journey. While we face some short-term uncertainty with the triennial review, the scale, talent and agility we have in this business represent real strengths going forward.
“We intend to use these strengths to establish Ladbrokes Coral as both the leading, and the best, betting and gaming business.”
More detail from the the triennial review, the government’s review of gaming machine stakes, is due to be published in the next few weeks.
Former culture secretary John Whittingdale recently warned the sector to expect bad news from government, which Mullen said had surprised him.
“The reason why is that the construct of the triennial review is a call for evidence,” he added.
“We presented the evidence and the evidence does not state there is a connection between stakes and prizes and problem gambling.”
Mullen told the Racing Post their commercial dispute with Arena Racing Company over betting-shop pictures had had a “favourable” impact on the company’s profits.
He said: “This is only a commercial issue. What we do have to say is from a profit perspective we’re not seeing any impact. In fact, it has been favourable.”
Mullen added: “We want to get it fixed and I’m sure sensible minds over the coming months will get to a resolution on this.”
New levy system waits on approval from Europe
Government plans to reform the levy system became law last week but the British racing industry cannot celebrate yet as European state-aid approval for the system has not yet arrived.
Racing’s new funding mechanism was not in place for the April 1 target date but both the government and BHA expect state-aid approval to arrive within days rather than weeks.
Minister Lord Ashton of Hyde told the House of Lords on Wednesday night that it had been informed by the European Commission that approval would not be received in time for April 1 and so the reformed levy would therefore not be in place by that date.
He added: “However, we are confident that clearance will be received shortly.”
That confidence was underlined by a spokesperson for the Department for Culture, Media and Sport, who said: “Payments to racing under the current levy scheme will continue until that happens, ensuring the flow of funding to the racing industry is not interrupted.”
The sport’s leaders believe the new system should bring in between £30 million and £40m extra per year.
BHA director of corporate affairs Will Lambe said: “We note and share the government’s confidence that state-aid approval for the new legislation will be received soon.”
Reacting to events in the Lords, Lambe said British racing had moved a “significant step” closer to a fair, enforceable and sustainable return from all betting activity on the sport.
He added: “We now await the anticipated European Commission clearance as the final formal step in the process and which will secure the new levy and have a transformative effect on our sport, in particular its grassroots and our tens of thousands of employees.”
The statutory instrument, entitled The Horserace Betting Levy Regulations 2017, received cross-party support in the Lords, just as it did from MPs earlier in the week.
However, not every peer supported the government’s plans.
Lord Lipsey, who has been a long-term opponent of the levy, said he believed “with total confidence” the levy replacement system would be subject to legal challenge.
He concluded: “Far from providing certainty to racing, this order promises prolonged uncertainty. Long term there is every chance this half-baked legislative scheme will collapse at the hands of the courts.”
As a trade body, the Remote Gambling Association cannot make a challenge in Europe but the organisation’s chief executive Clive Hawkswood said he believed one would emerge.
Hills appoint new CFO
New William Hill chief executive Philip Bowcock last week made his first major appointment to the bookmaker’s leadership team with the recruitment of Ruth Prior as chief financial officer (CFO).
Prior, who takes the role Bowcock has vacated, will join the company later this year from payments processor Worldpay, where she was chief operating officer.
Bowcock said: “Ruth is a strong addition to the William Hill board and executive team.
“Her experience in digital operations, online payments and finance is all highly relevant to our strategic priorities to deliver an even better customer experience and faster growth.”
Prior said she was excited to be joining William Hill.
She added: “I’m looking forward to working with the team to deliver the digital expertise, operational efficiencies and technology platform that will underpin the group’s further growth.”
Analyst Simon French at Cenkos said he expected further management change at William Hill.
He added: “We are encouraged to see another CFO appointment from outside the industry, in what can sometimes be an introspective sector, and Ms Prior’s experience of payments should prove valuable as the group increases revenue from outside the UK.”[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][bsf-info-box icon=”Defaults-envelope-o” icon_size=”32″ pos=”left”]For more information about Racing Post’s B2B services, contact us or browse more of b2b.racingpost.com.[/bsf-info-box][vc_column_text]Racing Post B2B caters for all digital content requirements across web, mobile, tablet and retail. But we are more than just a data provider – we enhance raw data with the best and most recognisable content authored by the biggest names in sports betting. Racing Post B2B offers an unrivalled worldwide content portfolio for bookmakers and media associations. Acknowledged throughout the racing and gaming industries, the Racing Post creates bespoke products suited to your audience that will enable your company to maximise profitability by offering unique data, editorial or multi-media solutions.[/vc_column_text][/vc_column][/vc_row]