Ladbrokes Nets Gaming Growth Ahead Of Limits

Ladbrokes (LSE: LAD.L - news) has revealed a significant rise in earnings from gaming machines described by critics as the 'crack cocaine of gambling', ahead of an industry-wide crackdown on their use.

The bookmaker said it was now making almost £1,000 weekly from each of its so-called fixed-odds betting terminals after adding 9,000 to its stable in the first half of 2014.

Ladbrokes said such gaming revenues, from activities including roulette, grew "ahead of expectations" by 6.4% in the second half.

The company revealed the gross win for Ladbrokes per terminal per week was £996 in its fourth quarter, up from £913 during 2013 and £682 in 2008.

It meant it was now making 14% more via its in-store machines than its traditional over-the-counter betting offering.

Ladbrokes said that while new regulations on £50-plus staking were being introduced by the Government in the second quarter of the current year, it was "already preparing our shop teams to meet the new requirements whilst continuing to deliver a good customer experience."

The regulatory crackdown on fixed-odds terminals, on which punters can potentially wager £100 every 20 seconds, aims to limit stakes in a bid to curb problem gambling .

The earnings figures were contained in the company's results which showed a 44% dip in group annual profits - hurt by recovery programme costs which included the closure of 89 poorly performing UK shops.

The betting firm, which is set to lose its embattled chief executive Richard Glynn this year amid frustration over a slow response to digital business growth, confirmed it planned to close an additional 60 UK stores this year with compulsory job losses likely.

Its statutory pre-tax profit for 2014 fell to £37.7m as Ladbrokes suffered its worst ever football daily loss on Boxing Day of £8.1m through punter wins.

But it managed to get the bulk of its retail and digital transformation plans ready in time for the World Cup.

As a result, group revenues rose 3.8% in the year to £1.2bn, with digital revenues rising 23% to £215.1m.

Richard Glynn, who will leave the business once a successor is appointed, said: "Ladbrokes entered 2014 clear on what needed to be done to deliver a successful World Cup and to move from operational delivery in H1 (first half) to financial growth in H2 (second half).

"We delivered against all our operational targets, enjoyed a successful World Cup and saw clear growth in key areas of the business.

"The changes put in place have made us competitive and our customers are responding.

"Strong operational delivery delivered a second half of growth as envisaged but the £8m hit on Boxing Day did take some of the shine off our performance.

"However, this is the business we are in and does not overshadow the positive customer reaction.

"Ladbrokes exited 2014 with pleasing operational metrics and is in good shape to compete even more effectively with a clear view on what more needs to be done.

"2015 will see new management but the focus on satisfying customer demands, improving the resilience of our retail estate, growing internationally and further improving our Digital offer remains.

"Whilst recognising there are regulatory headwinds, Ladbrokes is confident in its plans for 2015."