Digital development on track. Strong Retail growth drives increase in Group profit, cash and dividend
Growth in Group profits, balance sheet further strengthened
Group net revenue grew by 7.4% to £1,053.3 million
Group operating profit of £206.1 million, up 8.0% (up 25.8% including High Rollers)
Underlying earnings per share up 20.3% to 18.4p
14.1% increase in full year dividend
Net debt reduced by a further £67.0 million to £386.9 million, net debt to EBITDA now at 1.5x
Strong Retail performance
Favourable sporting results in final quarter underpin record UK Retail net revenue
UK Retail operating profit of £180.7 million grew by 18.6%. Profit per shop up for the third consecutive year
Consistent growth in UK Retail OTC net revenue, 3.8% up for the year
Machines net revenue growth of 13.9%, roll out of next generation terminal starting Q4 2013
100 net new UK shop openings planned for 2013
Operating profit in European Retail up over 50%
Digital development on track
Digital net revenue growth of 9.0% (H2 2012: 15.6%) driven by sportsbook after a strong Q4
Enhancements to trading contribute to significant increase in sportsbook margin, up 100 basis points
Full launch of new sportsbook website to UK customers during Q1 2013
Mobile platform on track to go live in Q2 2013. Mobile net revenue up 93.6% in 2012
Betdaq acquisition in 2013 will enable a differentiated offer and one stop shop for customers
Richard Glynn, Chief Executive, commented,
"We are continuing to transform Ladbrokes, with the resilience and reinvigoration of the UK Retail estate driving another year of growth in profit per shop. The development of the Digital business is progressing well and our investment in trading systems is generating improved quality of earnings. Ongoing business momentum has enabled us to deliver a strong Group performance with growth in revenue, operating profit and dividend.
2013 will see us continue to drive investment in areas where we see opportunities to grow the business. We will accelerate our programme of shop openings, focussing on areas of unmet demand. In machines, whilst the market is becoming much more competitive, we expect to generate continued growth through the use of Odds On, more exclusive games and the roll out of the latest new terminal towards the end of the year.
In Digital, after a delay during 2012, we will complete the roll out our new of our sportsbook and mobile platforms in Q1 and Q2 2013 respectively and look to improve our capability around customer relationship management. We expect these developments to drive growth in Digital revenues and earnings, particularly during the second half of the year.
Whilst we have benefitted from favourable sporting results, particularly in football, during the latter part of 2012 and early part of 2013, we are encouraged by the underlying growth in sports betting margins and expect to see a sustained improvement, with further trading developments planned throughout the coming year.
Economic conditions remain challenging and we are mindful of cost headwinds, particularly in UK Retail from increased machine taxation and horseracing picture rights. Despite this and although there remains much to do in order to complete our transformation of Digital, our progress to date gives us confidence, that we are focussing on the right areas of the business to drive increasing customer appeal and continued improvements in our operational and financial performance."
