2013 financial performance
Group net revenue down 0.6%
Group operating profit of £138.3 million down 32.9%
Underlying earnings per share down 36.4% to 11.7p
Full year dividend maintained at 8.9p (2012: 8.9p)
Full year exceptional costs of £51.6 million largely driven by costs of transition to Playtech products and platforms, business restructuring and impairment of shop licences
High Rollers contributed £5.9 million of operating profit (2012: £30.0 million)
Significant operational progress
Long term partnership signed with Playtech to accelerate Digital revenue growth from H2 2014 onwards
New mobile site on proven Mobenga platform launched in December with positive early feedback
Launch in Q4 of Ladbrokes Exchange and new poker product
Ladbrokes Innovation Lab established to deliver ongoing mobile product improvements - three upgrades already delivered and strong future pipeline
UK Retail presence grown with 121 new shops opened in higher footfall locations
Self Service Betting Terminals (SSBTs), Sky TV and free Wifi rolled out across estate in H2
Expansion delivered in Spain, new product launched in China and opportunity secured in Australia
2014 H1 focus on completing planned operational, platform and product upgrades
Digital - complete product migration, introduce single wallet and apply CRM expertise to drive performance in H2 and beyond
Machines - roll out of new Clarity gaming machines ahead of the World Cup to deliver benefits in H2
Retail - optimise retail estate to improve quality of earnings with 40 to 50 shop closures
Group - completion of the remaining platform, product and capability upgrades means H1 2014 Group operating profit is targeted to be ahead of H2 2013 but down on the comparative period with further growth anticipated through H2 2014
Confidence in business underpins commitment to 2014 dividend
Digital growth driven by new products allied to Ladbrokes Israel CRM expertise and Playtech agreement to December 2017
New product capabilities allow us to leverage brand strength to attract and retain customers
Continued evolution of Retail product ensures strong underlying cashflow
International markets offer further opportunities for growth
Free cash flow will benefit from capex returning to more normalised levels (FY14:c.£60-65m)
Dividend commitment in 2014 of at least 8.9p
Richard Glynn, Chief Executive, commented:
"While our financial results for 2013 were disappointing, we made real operational progress which has continued into this year. We remain confident about the direction of the business and the momentum we are creating.
"As we have made clear, H1 is about delivery and H2 is about growth. Our immediate focus is on the completion of our remaining platform, product and capability upgrades, notably single wallet and CRM, which will begin to deliver tangible benefits from the World Cup onwards.
"The early evidence from our changes to the desktop sportsbook and to our mobile offer are encouraging, giving us confidence that where our product upgrades and improved capabilities converge behind our brand, we have a powerful proposition. We look forward to competing even harder through the course of this year."
