From the Blue Index blog

Dont bet on Ladbrokes
May 15th, 2009

Shares in bookmaker Ladbrokes (LAD) were looking like a good recovery play up to this morning, having regained over 50% of their value after the October low of 133p last year

But this morning, Ladbrokes reported a 34% slump in profits for the first four months of 2009. Profits from big spending high rollers tumbled to just GBP25m from GBP40m in 2008, with punters enjoying a particularly good Cheltenham Festival in March. These abnormal gross win margin levels, increased free bets and unfavourable cost phasing in eGaming against the previous year resulted in the profits slump, although CEO Chris Bell was at pains to point out the rate of decline is not representative of our expectations for the year, and he said the decline has already given way to more normal trends in May. And overall, added Chris Bell, the general resilience of the business and strong cost controls gives us confidence in the outturn for the full year.

But brokers Noble, Shore Capital and Daniel Stewart all see the results as disappointing and weaker than expected, particularly given that results at rival William Hill are strong and in stark contrast

Full transcript here
http://blog.blueindex.co.uk/2009/05/dont-bet-on-ladbrokes/

Profits down, rights issue announced, no final dividend---------is this a good time to buy (150p)? Thoughts anyone.
2517

George - Worth a read!

Thanks for that skinny, it sure is looking gloomy for LAD and WMH with online outfits increasing popularity.
2517

So with all this gloom around LAD it could be a buying opportunity, sp now around 145p.
2517

Good luck George.

Glad to see them struggling !

They always were a greedy bookies, worst prices, the final straw was a football i placed with them recently, a double, both teams won after being behind in the first half, they refused to pay out one match because it had kicked off some ten minutes, strange how the computer picked this up when i came to collect my winnings but not when i placed the bet so it was a win win situation for them and the manager refused to use a little discretion and pay me out so their loss as i
wont use them again as a means of convenience.

140p+/- is the low so possibly a buying opportunity for a short term bounce.
From FT chat:
"The old struggling bookmaker line is (of course) one of the oldest tricks in the turf accountant text book - as punters are encouraged to bet more having fallen for the idea that somebody else is the mug for a change. Not for long.
This PR puff story tends to surface each year, and only the details vary. One of the more imaginative efforts came in 2005, when William Hill blamed the Racing Posts chief tipster Tom Segal for its woeful first half.
Did punters luck hold out? Of course not. When Hills eventually reported its full year numbers, both turnover and profit had experienced healthy hikes. What price on the same happening again?"

Evolution Dated 08/10/09:
DETAILS "Ladbrokes rights issue comes as a surprise given managements recently stated confidence in the sustainability of the debt structure. Market concern over poor sporting results means that the issue is being priced at a relatively very low share price. We believe trading results have been poor as a result of abnormal sporting results which will normalise. However, the online business appears to have lost its way and is now a drag on growth having once been seen as a potential future growth driver.
VALUATION AND RECOMMENDATION Our negative view was founded on capital structure and the risk from Hilton Hotels. The rights issue reduces the capital structure risk but the hotel risk remains. We retain our Sell rating and 150p price target ahead of adjusting for the rights issue. The nil paid rights start trading tomorrow which may cause a technical squeeze on the shares.
While the fresh capital raise assuages some of our concerns over capital structure we remain concerned over the hotel liability black hole and stick with our Sell rating.

If Ladbrokes did not have their revenues from their roulette arcade machines
they would be almost finished/loss making as a bookie, betfair has all the market, people in this econemy will get wise and go for better prices, a 12/1 shot on Ladbrokes will be 16-20/1 with betfair, same applies for all the bookies but eventually their long line of "mug" punters will realise their roulettes are not random draw generators and a simply a line of ready cash for Ladbrokes.

I've read of 3 investment co's having shorted LAD so maybe I'll postpone a purchase until the dust settles.
2517

Would be interesting to know when they are closing them, George. 140 looks to be the bottom on the chart.

Would see some strength when they do, the 140p mark is and has been the bottom over many years that I recall (haven't checked).
2517

The shares hit 130ish in 2003 - not that I think that has much weight here!

More here!

I used to know of a site where you could find out how much of a company's stock was out on loan. Seem to have lost it. If they shorted from 200/180 then they must be getting close to taking profit or at least tightening up their stop.

ADVFN used to hold the info but stopped last year when the shorting shite hit the fan.

lad will drop a bit more yet imo

Not far off the bottom though, imo. 135p maybe???

that seems about right - 135 to 140

More Ladbrokes shares shorted
Business Financial Newswire
New York-based asset manager Highbridge Capital Management has shorted 0.51% of Ladbrokes shares which are subject to a rights issue.



Story provided by Business Financial Newswire

"Nomura has cut its price target from 185p to 135p, explaining that 28p of the 50p cut is to reflect the dilutive aspect of the one for two rights issue while the rest is due to a lowering of earnings forecasts following last Thursdays statement."

I don't understand price targets such as the one above, if Nomura had a price target of 135p when the price was 185p then ok, but to give a price target whether on the up side or, as in this case the downside when their target price is virtually hit is meaningless, or am I just thick. Reply please on the 20 sheets of A4 supplied, ha!ha!
2517

only 20 sheets or did you mean reams?!! only joshing you are not thick just a lot more enters into the calcs - GL

A bookmaker who's "Profits are down, needs a rights issue, and now paying no final dividend"? sounds like they must have a particularly inept management.. avoid unless things become clearer I would have thought IMHO.

As I actually hold some of these, 95p (the rights issue price) still looks like a good bet (ho ho).

MM - good luck - but the funnymenatls say no!

skinny - yes, I'm having second thoughts. I might pass.

When these turn could be a good bet ... watching for now.

Goldman now got 7%

Hic!

LAD doing well today, WMH is doing even better.
2517

I suspect LAD being dragged up by the reasonable figures from WMH.
Be careful as anyone in profit here on the bounce will exit sharpish, imo.

Shares mag has it as a "high-risk buying opportunity for the brave" at 140.3

Do ya feel lucky?

Trafalgar reduces Ladbokes shorting position

Trafalgar Asset Managers has reduced its short position in Ladbrokes shares.

Having previously held a short position equivalent to 0.46% of the issued share capital of the bookmaking firm, Trafalgar says this was reduced to 0.28% on 21 October 2009.

Starting to look interesting for us mortals!

Now 123P ish. I noticed a 112p TP by 1 analyst.
2517

Business Financial Newswire 26.10.09
"Bookmaking group. Ladbrokes says that the 5% rump of shares not taken up in the rights issue have been placed at 136p per share.

In the open market this morning, the shares were trading at a mid-market price of 138.0p, up 0.6p since the market open."

How things have changed!!! Currently 123p.

ladbrokes caught my eye today as it seems to have so many TA positives going for it bar the market as a whole in general but in time Im sure we will see a recovery here.

The inverse head and shoulders is also covering a floor on the stock and if we go with normal TA rules the pattern would lead to approx a 30 point gain from breakout.

Ive bought today, one to keep an eye on.

ditto wm hill

Will have a look cheers cyners.

Added a few more here, way too cheap imho.

Missed this is must have come out late that day....

2009 2010
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Daniel Stewart
07-12-09 BUY 170.40 18.83 3.50 161.30 14.45 7.00

Results tomorrow.

Final Results.

Financial Results



Group net revenue(1) of 963.7 million (2008: 1,052.9 million)

Group operating profit(1)(2) of 168.5 million (2008: 250.7 million)

High Rollers operating profit of 66.9 million (2008: 80.1 million)

Interest(3) of 44.1 million with blended interest rate of 4.9%

Profit before tax(3) of 191.3 million (2008: 265.6 million)

Effective tax rate(3) of 15%

Earnings per share(3) of 21.7 pence (2008: 32.2 pence(4))

Cash generated by operations was 226.0 million

Group net debt was 694.2 million at 31 December 2009 (31 December 2008: 987.1 million) with undrawn committed bank facilities of 428.1 million

As announced at the rights issue, the Group will not be paying a final dividend, giving a total dividend for 2009 of 3.5 pence per share.(5)

Corporation Tax Settlement


TIDMLAD

RNS Number : 5125K
Ladbrokes plc
21 April 2010

?
Corporation Tax Settlement

Ladbrokes plc has reached a settlement with HM Revenue and Customs ("HMRC")
which covers substantially all outstanding items in respect of tax years through
to 31 December 2007. Ladbrokes expects a cash receipt in 2010 of approximately
GBP80 million in respect of corporation tax repayable from HMRC.

The settlement results in the recognition in the 2010 Income Statement, within
the tax charge, of a GBP262 million tax credit in relation to prior years. Of
this credit, GBP216 million relates to current tax, and GBP46 million relates to
the recognition of a deferred tax asset. This asset primarily reflects the
recognition of tax losses available for offset in future periods.

The finance charge in 2010 will be reduced by approximately GBP20 million to
reflect the interest consequences of the settlement.

Our guidance for the effective accounting tax rate over the medium term remains
unchanged at 19%. We anticipate that the cash tax rate over the same period
will fall to about 15% to reflect the utilisation of tax losses.

bottom? or cotton?

LAD in early stage talks with 888

The price action on LAD has looked encouraging ever since the bottom two weeks ago, Friday's action particularly so - possibly through insiders trading on expectation that the 888 rumour would crystallize over the weekend.

Bookmaker Ladbrokes is due to update the market on recent trading. The City will be looking for thoughts on the chain's 600m takeover talks with online gaming firm Sportingbet ahead of the October 17 deadline. Analysts at Shore Capital said in a note last week that, at Sportingbet's current share price, the market could be already discounting on the basis that no deal will be forthcoming. "If this is the case, then Ladbrokes clearly needs to provide a credible roadmap for how it intends to reinvigorate its online operation either organically or via other acquisition targets," they said.

Ladbrokes' woes could be coming to an end following profit boostBookmaker attempts to put failed digital strategy behind it as 50% online profit drop in line with expectations
Share 0
Email Simon Neville
guardian.co.uk, Thursday 2 August 2012 15.42 BST Jump to comments (0) If you ever want a lesson in how to control market expectations you only need to look at the masterclass given by the country's second-biggest bookmaker, Ladbrokes.

The company saw an 11% rise in operating profit to £106.9m, on revenues up 8% to £529m in the first six months of the year.

But operating profits on its digital arm dropped a devastating 50% from £29.7m to just £15m over the same period after boss Richard Glynn decided to invest £50m on a new digital strategy, which revolved around improving its website.

Whereas more established bookies have snapped up up-and-coming online rivals, Glynn decided the best course of action was to spend the money in-house rather than make an acquisition.

But the decision was a failure – the website has been delayed around 12 months after users complained, and computer glitches meant the company could not transfer its database from the old website to the new.

All at a time it was hoping to cash in on the Euro 2012 football and a well-known sporting event taking place in London this summer.

Meanwhile, bigger rival William Hill continues to grow and saw profits up, while its digital offerings have been well-received.

So, with such a pounding taken due to its digital strategy, why are shares up 2.2p at 156.9p, especially when online is one of the fasting growing areas in betting?

The answer is, Ladbrokes put its hands up pretty early on this, admitting its problems and attempting to move on.

Nothing was fudged to sound more positive than it was, and investors and analysts were kept updated.

The company also did the unthinkable (when you consider how long it took the likes of Bob Diamond et al to stand aside) by sacking Richard Ames, the director responsible for the disaster.

Today, analysts were broadly in agreement that Ladbrokes could and should improve.

http://www.moneyam.com/action/news/showArticle?id=4420364


Ladbrokes delivers growth in profit, cash and dividend



Financial highlights

· Group net revenue (1) grew by 8.4% to £529.0 million

· Group operating profit (1) (2) of £106.9 million, up 11.0%

· Profit before tax up 48.9% to £106.9 million

· Underlying earnings per share (3) up 25.3% to 9.4p

· 23.8% increase in cash generated by operations

· Net debt reduced by a further £56.9 million to £397.0 million

· 10.3% increase in interim dividend to 4.30 pence





Operating highlights

· UK Retail operating profit (1) (2) of £91.3 million, up 21.1%

· 2.4% growth in OTC (over the counter) net revenue with continued resilience in amounts staked, up 0.7%

· Machines net revenue up 20.1% with gross win per terminal week of £947 for H1 and £970 in Q2

· Odds On launched on machines ahead of schedule, already in use by over 100,000 customers

· Over 94% operating profit (1) (2) growth in European Retail driven by revenue growth in Ireland and Belgium

· Digital net revenue growth of 3.0% driven by sportsbook growth of 10.7%

· Growth in Digital actives maintained with 21.5% increase over the period (H2 2011: 18.2%)

· Over 110,000 new sportsbook customers and over 65,000 new casino customers year on year

· Continued growth in Bet in Play with stakes now 58% of total Digital sportsbook amounts staked (4)

· Over 25% of sportsbook net revenue and 37% of total sportsbook actives on mobile

The good results starting to show in the share price

Bookmaker Ladbrokes added 5.6 to 184.1p on the FTSE 250 , reaching its highest level since 2009, with one dealer saying expectations of a shake-up at its digital division, as well as lingering bid speculation, were behind the share price move. The group pledged last month to revive its digital offering after revealing in its first-half results that profits at the division had dropped to £15m from £29.7m a year earlier.

Sold my holding, held since oct 2011, they have performed well

Bet you haven't :-)

How much. lol I have learnt a lot, hold on to long and i get burnt.lol

Ex-divi wed 20th March (4.6p)

Ladbrokes plots online boost

LADBROKES is poised to strike a deal with Playtech, a gaming software supplier, in a move to boost its online operations.

The two are in advanced talks about a tie-up that would hand Playtech a bigger role in running the bookmaker’s internet casino and bingo games. It may also help with online sports betting.

The deal follows the planned sale of Playtech’s stake in a joint venture with William Hill, Britain’s biggest bookie. The software company has been instrumental in transforming William Hill’s online service. However, its involvement in the venture has restricted its ability to work with the other big bookmakers.

Ex-divi wed 18th Sept (4.3p)

Canaccord note today:
"Ladbrokes produced another profits warning. It stated that its Retail business has seen some recovery in footfall and amounts staked since the weak July trading update, but margins have been lower than expected, while there is some upward pressure on costs. However, the real disappointment has been Digital, where margins have been particularly weak, and it has under-estimated the disruption from its transition over to the Playtech platform. Digital profits are now likely to be in the range of £10m to £14m, which compares with the consensus forecast of £27.5m. And given the run-rate in Retail, we see a shortfall of at least £6m to previous consensus forecasts of £143.8m.
This is the third profits warning from Ladbrokes so far this year and while there has been some impact from external factors – weather, results, intensifying Machines competition in the High Street – the Digital performance has been beyond disappointing, while retail appears to be underperforming the competition. We are cutting our EBITA forecast from £170.7m (consensus £170.6m) to £147.1m, reducing our PBT (norm) from £148.7m/14.5p to £125.0m/12.2p, which is a 16% EPS downgrade. Significantly, management has committed to holding the dividend both in 2013 (when we estimate it will be just 1.4x covered by earnings) and also in 2014. Details of the changes are in the table on page four.
This is clearly another deeply disappointing update from Ladbrokes, putting considerable pressure on the CEO, Richard Glynn, who has seen Digital profits drop from £63m to less than £14m since his arrival. The Playtech contract does provide a structure for significant improvement in Digital in FY14, although it appears that the transition from the existing Microgaming platform may also be slower than expected. The shares are trading on an estimated 15.5x current year PER and 10.0x EV/EBITDA, which does not look compelling, until there is evidence of a significant turnaround in Digital. And investors are unlikely to take a lot on trust, given recent disappointments. The 4.8% dividend yield should provide some support, but we reduce our multiples-derived TP from 220p to 190p and move from Buy to HOLD."

Canaccord Genuity Hold 176.75 188.10 220.00 190.00 Downgrades

Shore Capital Hold 176.75 188.10 - - Retains

Numis Add 176.75 188.10 - 210.00 Downgrades



Just had a small dabble here @174p

Gap closed for now.

Notice of post-close trading update
Ladbrokes plc will be announcing a trading update for the year ended 31 December 2013 on Thursday, 16 January 2014.

Interim Management Statement

Q1: OPERATIONAL OBJECTIVES ACHIEVED TO DELIVER PLATFORM FOR GROWTH, FINANCIAL PERFORMANCE IN LINE
Ladbrokes PLC (LSE: LAD) (Ladbrokes or the Group) announces its Interim Management Statement for the 3 months ended 31 March 2014 (the period or Q1).

Digital operational achievements:
· Gaming products transitioned to Playtech Casino on 27 March
· Digital integration onto Playtech IMS/ single wallet platform completed on 29 April
· Positive Q1 mobile sportsbook KPIs: mobile actives +32%, stakes +95%
· Post Q1: Grand National sportsbook and mobile digital operational performance strong

Retail operational achievements:
· Self service betting terminals (SSBTs) roll out on track, driving incremental football activity (c.75% amounts staked)
· Machines: now over 5,500 of 9,000 new Clarity machines deployed - on track for pre-World Cup delivery
· Estate optimisation underway - 24 UK stores closed, c.50 closure target for 2014 confirmed

International operational achievements:
· Spain: retail launch in Catalunya on track, confirmed for May
· Belgium: SSBTs trial successful, roll-out from May; Digital launched on 28 April
· Australia: Ladbrokes Card launched; trading in line with plan; acquisition of Betstar, earnings accretive

Q1 financial performance in line with our expectations(1)(3)
· Group operating profit(2) £18.4m, consistent with FY14 guidance issued in February
· Group net revenue -£6.5m or -2.3% (-5.1% exc. Betdaq and Aus.) - impacted by industry-wide results
· Digital: net revenue +1.1% on Q4 2013 (-4.4% exc. Betdaq and Australia.); strong mobile operational performance
· UK Retail: net revenue -2.3%; OTC amounts staked up 8.5%
· High Rollers net revenue: £13.0m, up 80.6%
· Board confirms 2014 dividend commitment of at least 8.9p per share

Richard Glynn, Chief Executive, commented:

"In Q1 we delivered all of our stated operational targets on track or ahead of plan and our financial performance remains consistent with our expectations at the time of our annual results announcement in February.

Retail competed well demonstrating its continued appeal to the customer. In particular, it was pleasing to see OTC staking grow, driven by a strong performance in football. In Digital, the early encouraging customer response to our more competitive mobile and sportsbook offer has continued and our Grand National performance, particularly on mobile, shows that our product and platform improvements are starting to gain traction.

The unexpected recent tax increases and ongoing uncertainty surrounding regulation are unwelcome. We continue to advocate an evidence based debate and to demonstrate our commitment to social responsibility. The significant economic impact of excessive regulation on the business and in terms of jobs, is clear. However, we are heartened by the strong support we have received from customers who continue to enjoy using our products, with one million people recently signing an industry petition in support of their local betting shop.

Looking ahead, the build up to the World Cup will see heightened competition. We are now in position to compete hard, targeting customers through our brand and improved products along with aggressive but sensible offers and promotions. In Digital, with the move to IMS and single wallet capability, we now have in place all of the operational infrastructure from which to drive growth in H2 and beyond."

Fitch Rates Ladbrokes' 5.125% 2022 Wholesale and Retail GBP Bond 'BB(EXP)' LADB.BR

(The following statement was released by the rating agency) LONDON, May 28 (Fitch) Fitch Ratings has assigned Ladbrokes plc's (Ladbrokes; BB/Stable) proposed senior unsecured 5.125% 2022 wholesale and retail GBP bond a 'BB (EXP)' expected rating. The assignment of the final rating is subject to the receipt of final documentation conforming to information already received. The bond is being issued to diversify funding sources, to reduce reliance on bank debt and to extend Ladbrokes's debt maturity profile. Fitch believes the proceeds will be used to repay Ladbrokes's drawn revolving credit facility (RCF) debt as well as for general corporate purposes. There will therefore be no increase in gross or net debt initially as a result of the bond issue. The bond is being issued by finance subsidiary Ladbrokes Group Finance plc and guaranteed by Ladbrokes. The bond is rated at the same level as Ladbrokes's Issuer Default Rating of 'BB' as it will rank equally with the company's senior unsecured debt, including the existing GBP225m 2017 bond and RCF debt. Ladbrokes's current ratings reflect a difficult UK betting environment, risks to the future profitability of Ladbrokes' on-line business and its high leverage at end-2013 (3.8x on an adjusted funds from operations (FFO) net leverage basis), which is likely to remain at or above 3.0x by end-2016. KEY RATING DRIVERS: Weak UK trading After a difficult 2013 betting shop environment characterised by higher-than-inflation cost increases, particularly in content costs, UK retail profitability for 2014 will be negatively impacted by an increase in machine games duty (MGD) to 25% from 20%, which could reduce operating profits at Ladbrokes by up to GBP22m in a full year. High Digital Transformation Costs Ladbrokes was off to a slow start in the digital market and has been underperforming in what is becoming a transformational requirement for a modern betting business. Fitch views the company's five-year partnership with Playtech positively as it provides access to up-to-date technology and know-how. All transitional changes are expected to be complete by end- 1H14, and the effects on digital's performance from 2H14 should be positive. Ladbrokes has, however, confirmed a continued high level of capex in FY14 for its digital operations, amid a fierce advertising and expensive marketing battle among large betting groups to attract new active and profitable customers. In Fitch's view it is uncertain whether or not the re-launch of Ladbrokes's digital operations will translate into sustained higher profits in 2014 and 2015. Maintained Dividends Higher-than-expected operating costs in 2013 negatively affected the company's free cash flow generation and thus its deleveraging efforts last year. Despite this reduced cash flow generation, Ladbrokes continues its shareholder-friendly policy with its decision to maintain its dividend policy (GBP81m in 2013). While this shows the degree of confidence of management in the business it nonetheless constrains cash flow available for debt service. Deleveraging Slowing Following weak operating cash flow in 2013 and stable dividends, Ladbrokes's de-leveraging has stalled. Leverage increased to 3.8x at end-2013 from 2.7x at end-2012, and Fitch does not expect it to fall below 3.0x before 2016. This reduces financial flexibility at a time of strong competition in the betting market. FOBT Gaming Regulation The UK government has recently set out plans for improving player protection on fixed odds-betting terminals (FOBT). These involve letting players control their gaming choices and the amount they spend. The measures include customers who want to bet over GBP50 on a FOBT having to pay over-the-counter, machines displaying a choice of set limits on spending by customer, customer accounts allowing players to track their own spending and warning messages and pauses to allow players to be more aware of their gambling. Lastly the proposals strengthen the voluntary self-exclusion system, so that players can make a single request to be banned from betting shops on a wider basis. If the UK government introduces new gaming-amount limit restrictions on fixed odds-betting terminals (FOBT), Ladbrokes will probably be more affected than its close competitor William Hill. This is because over 50% of Ladbrokes's UK retail operating profits comes from FOBT terminals and the company currently has a weaker digital platform than William Hill. Solid Liquidity The group has strong liquidity with over GBP365m of available cash and undrawn committed facilities at end-2013. Ladbrokes does not face any meaningful debt maturities until 2016, when the group's GBP540m bilateral facility falls due while its GBP225m bond only matures in March 2017. RATING SENSITIVITIES Positive: Future developments that could lead to positive rating action include: - Further strengthening of operations with an established competitive profile in online gaming, a stabilised UK retail business and lower reliance on the UK market - Positive FCF on a sustained basis - FFO adjusted net leverage sustainably below 3.0x - FFO fixed charge cover above 3.0x (end-2013: 2.7x) Negative: Future developments that could lead to negative rating action include: - Further material deterioration in UK retail operating profits, adverse regulatory developments and no significant improvement in digital operating profits - FCF in negative territory - FFO adjusted net leverage rising towards 4.0x due to continued weak trading, or for over 12 to 18 months due to M&A activity - FFO fixed charge cover below 2.5x

Half Yearly Report

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014

H1 OPERATIONAL OBJECTIVES DELIVERED; A GOOD WORLD CUP; POSITIONED TO DRIVE GROWTH

H1 key operational objectives delivered
· Mobile Sportsbook growth: staking +105%; actives +74% yoy; conversion rates improved by 14ppts
· Playtech migration completed; new back office (IMS/single wallet), casino and bingo products
· IMS/single wallet delivers improved customer experience and more effective marketing capability
· Successful roll out of c.9,000 Clarity machine cabinets ahead of World Cup
· SSBT estate grown to 1,750 supporting UK Retail focus on football
· Further international diversification: Australia - Betstar acquired and integrated

Good World Cup performance(5)(6) - a competitive customer offer
· Group stakes(7) £115.3 million up 22.4%; gross win margin(7) 24.3%
· Digital net revenue up 25.9%; sign ups up 48%; actives up 28%
· Mobile staking growth up over 1100%; 63% of sportsbook staking
· UK Retail staking up 7.9%; gross win margin 27.4%; significant increase in multiples
· Spain Retail JV(7) staking up 160%; Belgium Retail staking up 157%

Financial performance - H1 EBIT ahead of H2 2013 consistent with guidance

· Group net revenue(1) up 1.6%(2) despite some poor industry wide sporting results

· Group operating profit(1) (3) of £56.8 million down 33.7%

· Underlying earnings per share(4) down 38.6% to 4.3p

· Half year dividend maintained at 4.3p per share (H1 2013: 4.3p)

· High Rollers contributed £10.7 million of operating profit (H1 2013: £3.4 million)

Bought in today, near multi year lows, ex div later this month so get paid whilst I wait for sp to perform I guess.
2517

StockMarketWire.com
Bookmaker Ladbrokes is on track to meet its full year targets after revenue and profit growth in the third quarter.

Ladbrokes said group net revenue rose by 13.0% (+9.6% exc. Australia) and group operating profit of £33.0m was up 94% (Q3 2013: £17.0m) and on track for full year expectations.

Total Digital net revenue was up 45.9% (+22.9% exc. Australia). Sportsbook net revenue was up 58.2%; stakes +21.6% driven by mobile (+113%).

Chief executive Richard Glynn said: "Ladbrokes is on track. The major operational improvements completed in H1 are now delivering growth. Our performance in the World Cup and throughout Q3 demonstrate that we are competing successfully and winning customers.

"In Digital, our sportsbetting offer continues to perform well with net revenue up over 50% driven by mobile. In Gaming we are encouraged to see a return to growth. In UK Retail, our focus on football continues to deliver good growth. Our gaming machines performed ahead of our expectations while we have, simultaneously, enhanced standards in social responsibility.

"We entered the final part of 2014 with a competitive and attractive offer. We have achieved much operationally in 2014, with further opportunities to drive revenue in 2015 and beyond. Q4 has started in line with our plans and, with usual sporting results, we will deliver full year results in line with our expectations."

See William Hill. SP already at four year low, not technically oversold yet but pretty close on RSI.

LATEST BROKER VIEWS

Date Broker New target Recomm.
28 Nov JP Morgan... 95.00 Underweight
28 Nov Exane BNP... 150.00 Outperform
11 Nov JP Morgan... N/A Underweight
4 Nov Credit Suisse 125.00 Underperform
31 Oct Deutsche Bank 165.00 Buy
24 Oct Deutsche Bank 165.00 Buy
24 Oct JP Morgan... 95.00 Underweight
23 Oct Goodbody N/A Hold
23 Oct Numis 100.00 Reduce
23 Oct Canaccord... 150.00 Hold
Broker Recommendations for Ladbrokes

Ladbrokes' search

StockMarketWire.com

Bookmaker Ladbrokes will shortly start a process to identify a successor for chief executive Richard Glynn who will leave the company next year at the end of his five-year term.

The search will evaluate both internal and external candidates.

Glynn has been implementing a fundamental re-engineering of its business and operational and digital capabilities.

Ladbrokes says: "As this year has progressed, it has become increasingly clear to the board that the necessary organisational and operational changes have been implemented and the benefits of the transformation plan are beginning to come through.

"Whilst the Board acknowledges that the recovery programme has taken longer to deliver than initially anticipated, in great part due to economic and regulatory headwinds, the Board believes that the changes made are now deeply embedded in the organisation and that increasing attention should now be focused on delivering sustainable growth from a much stronger operational and digital platform.

"With four weeks to go the Company is trading in line with its expectations for the current year and is confident that 2015 will see further operational and financial progress."

Glynn was appointed CEO of Ladbrokes in April 2010, with a clear mandate to implement the recovery programme within a five year term.

Following extensive and constructive discussions between the Board and Richard, it is intended that he will complete his term and continue in his role as CEO into 2015.

The board will shortly start a process to identify his successor and the search will evaluate both internal and external candidates.

Once an appointment has been made, Glynn has agreed to remain in post as required to ensure an orderly transition. Chairman Peter Erskine said: "On behalf of the Board, I would like to thank Richard for his leadership of the Company and his considerable achievements in delivering a new digital future for Ladbrokes. He has devoted enormous energy and dedication to securing the transformation of the Company and the benefits of that work are beginning to be seen. I am pleased that he will both see through the final steps of the implementation plan and be on hand to facilitate an orderly succession process. Ladbrokes has been transformed and is a far stronger company as a result of his work. " Glynn commented: "Everyone at Ladbrokes has worked incredibly hard over the past, nearly five years, to deliver the transformation programme. We have faced significant operational challenges, as well as economic and regulatory headwinds. However I am pleased that the business is fundamentally stronger than it was and now has the operational and digital capabilities to compete effectively. We have delivered against all of the recent milestones and increasingly shown real competitive momentum ".

"It has been a privilege to lead Ladbrokes over this crucial phase. I am very proud of the resilience and professionalism the team has shown during this intense period of activity. It is the right time for Ladbrokes to identify my successor. I will continue to serve the Company to help ensure a smooth succession I look forward to the Company, the shareholders, our partners and in particular everyone in the team reaping the benefits, over the next few years, of all that has been sown."



Story provided by StockMarketWire.com

Talk of Harriet Green (ex TCG) taking the vacant role, if right then sp should improve from here.
2517

Already in WMH George, if that rumour becomes fact reckon it's worth a punt. Long on the spreads 118.22 stop 108.22

LATEST BROKER VIEWS

Date Broker New target Recomm.
5 Dec Deutsche Bank 165.00 Buy
4 Dec JP Morgan... 95.00 Underweight
3 Dec Goodbody N/A Hold
3 Dec Shore Capital N/A Hold
3 Dec Panmure Gordon 135.00 Hold
28 Nov JP Morgan... 95.00 Underweight
28 Nov Exane BNP... 150.00 Outperform
11 Nov JP Morgan... N/A Underweight
4 Nov Credit Suisse 125.00 Underperform
31 Oct Deutsche Bank 165.00 Buy
Broker Recommendations for Ladbrokes

Mixed bag from the brokers as usual CC, good luck with WMH (I'm not in) and your punt on LAD.
2517

Probably a glutton for punishment. Back in long on the spreads this morning (Mar Contract) @ 115.13. Initial target 140p Stop 98p. Preliminary results 26th Feb. Ex Divi March. 52wk low 102.20 - 52wk high 167.30.

Stop to entry for risk free trade.

Marking time, still hoping for a push leading up to results.

LATEST BROKER VIEWS

Date Broker New target Recomm.
11 Feb Deutsche Bank 165.00 Buy

Careful with this one CC. I saw a broker note yesterday saying that LAD were probably going to suffer if the WMH / 888 takeover goes ahead.

Who knows Harry, broker notes mixed at best. Got a tight stop anyway.:0)

There is a negative article in Shares Mag apparently.

And Chris - so we've heard! :-))

Negative article in Shares Mag? Now there is a cast iron buying signal if ever i saw one. :0)

Taken profits here (like watching paint dry) @ 120.41 + 5.28.

Well the WMH/888 takeover didn't take place. LAD sp severe headache banging constantly against resistance. Preliminary results 26th Feb. Left a limit buy on spreads @ 124p tight stop if filled.

bought in @112 no exceptional profit,in results , divi up s/p to go past 130 if so.

Well timed exit Chris (post 86)
2517

Afraid so George. Could have to wait awhile before limit buy filled.

Getting closer to my limit buy. Thinking perhaps may spike in conjunction with WMH tomorrow if their results are received positively, not holding my breath. But who knows?

Could go either way tomorrow.

Ladbrokes announces 60 betting-shop closures - profits drop

midnight - All doom and gloom for LAD yet up 5.25% today, go figure as the yanks say :0)

Feb 26:
Panmure Gordon: Hold - TP: 135p
Numis; Reduce - TP: 100p
JP Morgan: Underweight - TP:110p

I'll take any spike that's going tomorrow :0)

I'm with PG, don't like the look of the other 2.
2517

Still waiting :0)

Feb 27:
Canaccord: Hold - TP: 115p
Barclays: Equal Weight - TP: 122p
Deutsche Bank; Hold - TP: 112p
JP Morgan: Undewrweight - TP: 110p

sold small profit @ 1 1 8

StockMarketWire.com
Bookmaker Ladbrokes reports improved operating metrics in the three months to the end of March. But it says results have favoured customers and profits are materially down.

Ladbrokes says group net revenues rose by 3.3% in the period but EBIT fell to £14.3m - down from £35.6m in the previous three months and down from £18.4m a year ago.

Chief executive Jim Mullen said: "In Q1 many of our customer metrics are encouraging but results have favoured customers and profits are materially down.

"These results demonstrate the challenges we continue to face. We need to change the way we run the business, build scale, primarily in Digital and respond faster to the customer and changes in the market place.

"I will complete my review of the wider business quickly and I will present some of the principal changes that I intend to make, in June, earlier than planned.

"Shareholders should expect me to focus on how we will build an effective competitive position, develop scale and resilience over the medium-term.

"I believe strongly in Ladbrokes. We have laid solid operational foundations but there is still a lot to be done. The decision to seek examinership in Ireland demonstrates the seriousness of our intent and the speed with which we will execute."

Exane BNP Paribas reiterates outperform on Ladbrokes, target raised from 120p to 125p

Still going against the trend only this time it's upwards.
2517

Statement regarding potential merger of Ladbrokes plc and Coral Group
In response to recent press speculation, Ladbrokes plc ("Ladbrokes") confirms that it is in discussions with the board of Gala Coral Group Limited ("Gala Coral") regarding a possible merger of Ladbrokes and Coral Retail, Eurobet Retail and Gala Coral's Online businesses ("Coral Group"), to create an enlarged business (the "Combined Entity") which would be listed on the official list of the UK Listing Authority (the "Official List") and traded on the main market of the London Stock Exchange.

Shareholders are advised that there can be no certainty that the discussions between Ladbrokes and Gala Coral will lead to any agreement concerning the possible merger or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would be completed. Ladbrokes also notes that, in the event that such a transaction proceeds, it may undertake a non pre-emptive equity placing to strengthen the balance sheet of the Combined Entity.

In light of this development, the Business Review presentation scheduled for 30 June may be re-scheduled depending on how discussions progress.

A further announcement will be made as and when appropriate.

Jim Mullen, CEO Ladbrokes plc, said

"Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders.

A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies' shareholders.

The Board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms."

Excellent news and nice jump in the sp.
2517

Jeffries note today:
"There is definite strategic logic to a Gala Coral merger given LAD's struggles to develop digit scale itself. But the deal structure could be dilutive, given fresh equity required, rather than LAD being a bid target as many had hoped. We assume combined marketing spends would be unchanged, with synergies reliant on shrinking the retail estate. We are a little surprised by the market's exuberance this morning.
The boy who cried wolf. Following acres of print speculation about possible M&A at Ladbrokes over recent months and years (some confirmed, most not) the confirmation of a possible merger with Gala Coral is both exciting and disappointing to us. Exciting because the partnership may finally catalyse digital progress; disappointing because there is no bid premium for LAD shareholders. The Board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms. Our first impressions are that this looks quite a defensive strategy for LAD, with new CEO Jim Mullen’s much anticipated Strategic Review on 30 June now potentially shelved.
Strategic appeal. Any plan to revitalise LAD's lagging digit business is worth hearing, and a marriage with Gala Coral has definite appeal on that front. The logic for the merger would be benefits of scale, particularly in growing LAD’s lagging digital offer. Gala Coral reported £200m EBITDA in 2014 versus £218m for LADS, of which £49m from online versus £37m at LAD. In terms of market shares: Gala Coral has 2.1% of the UK sports betting online market in 2014 versus 6.6% for LAD. For online gaming, Gala Coral has 9.5% of the UK market (doubled in the last two years) versus 4.2% for LAD (source Gambling Compliance).
Playtech is entitled to 27.5% of 2017 EBITDA upside in Ladbrokes.com versus a 2012 base of £45.9m multiplied by the underlying group EBITDA multiple at the time, there are interim payments to be made if certain targets are met.
Quick and dirty stab at combined financials. The RNS mentions "the potential to generate substantial cost synergies". With 2,209/1,834 retail stores respectively for LAD/Gala Coral we assume that shop lease costs and associated staff costs are front of mind (not least given likely anti-trust scrutiny), alongside removing duplicated central costs. Given the importance of marketing in supporting the digital offer, we assume the combined marketing spend would be similar to the sum of the parts (c.£47m for each company). We need more information and more time to refine our scenario analysis, but a 'quick and dirty' synergies calculation (10% combined property/staff savings) implies pro-forma EBITDA of £500m (versus £418m ex-synergies). NB Restructuring costs could be significant, particularly in respect of leases.
Dilution from fresh equity. Gala Coral is highly geared, with all in net debt/EBITDA of 11x in 2014 versus 1.8x at LAD. We think the market has little appetite for net debt/EBITDA greater than 2.5x. Gala Coral has a complicated financing structure and at this stage we are unsure how much of any debt will sit outside of the PLC structure, were a deal to consummate.
Understanding this detail is key to gauging the quantum of fresh equity to be issued, which we await before running our numbers. Valuation. Before the open LAD traded on 14.8x 2016 PE and 8.2x EV/EBITDA on our estimates, a justified discount to peers (25% to WMH, 45% to PAP on EV/EBITA) given its weak online division and over-exposure to retail gambling."

last post 16 feb have now a nice profit, will sell @150 pence?

CitiBank note today:
We downgrade to Sell and retain our 125p price target. The deal is high risk and complicated: likely competition authority involvement; unclear management structure; lengthy process; equity issue; execution risk; political sensitivity of LBOs. Other, financial buyers may be flushed out, but probably only when a deal falters and synergies are no longer on the table.
Starting line. We see three key questions for the Ladbrokes/Gala Coral merger: 1) How could the competition authorities permit the transaction? Take a holistic (but new) view of the gaming market, to include lotteries and thus avoid market share issues; 2) What are the likely cost savings? £25m, mainly savings from head office, platform sharing and marketing; narrowing the retail performance gap could add more upside; 3) How much capital would the enlarged group need to raise? We value Gala Coral at c£2bn; with a target 2x net debt/EBITDA ratio, the deal could be financed with £350m additional leverage and £1.7bn of Ladbrokes equity
Citi analysis – limited upside. Our base case (£25m cost savings, £350m fund raise and 2x net debt/EBITDA) also values Gala Coral at 10x EBITDA (inc. 50% of the cost savings), so £2.03bn in total. The debate for Gala Coral is whether the synergy benefits will offset the likely valuation multiple hit from greater proportional retail exposure. We anticipate the deal is c4% earnings accretive. If one optimistically assumes a 10x EV/EBITDA multiple is applied to the enlarged business (William Hill valuation), then a c150p value is possible. Overleaf we provide various cost savings and valuation multiple scenarios.
Different perspectives. The merger holds little downside for Gala Coral (perhaps beyond a break clause), allowing the market to better understand the business and management. Ladbrokes has a different starting point: We await a strategic review, with a new CEO and departing chairman.
 High competition hurdles. Ladbrokes Gala Coral would own c50% of licensed betting offices (LBOs) in the UK, with LBOs a longstanding political hot potato. Convincing the competition authorities to view the deal through a total market lens (thus including lotteries and online) would reduce that market share to greater than 20%."

StockMarketWire.com
A combination of Ladbrokes with most of Gala Coral would create a UK market leader with a stronger business profile than either group could achieve separately, Fitch Ratings says.

But the agency says that depending on the capital structure decided by the new entity, it may need to raise new equity or quasi equity if it wants to achieve a financial profile similar to Ladbrokes' standalone profile.

Ladbrokes revealed the early stage merger talks over Gala Coral's betting shops, Italian operations and online business earlier this week. It did not say how a deal would be structured but that it could include an equity placing to strengthen the balance sheet of the combined entity.

Fitch says that even without an equity placing, the combined entity's credit rating would probably be no more than one notch below Ladbrokes' current 'BB' rating. Any assigned rating would depend on multiple factors, in addition to leverage considerations.

Fitdh says: "The business profile of the combined entity would be supported by the combination of Gala's strong online presence, where Ladbrokes has underperformed, and its Italian operations, with Ladbrokes' and Coral's large UK shop portfolio, well-known brands and long UK track records. Ladbrokes' Australian presence would strengthen the combined group's international diversification.

"We believe there would also be the potential for material cost savings through the closure of some of the combined group's 4,000 UK betting shops. Other synergies and cost savings are possible. For example, the two companies share the same machine provider and could therefore achieve purchasing savings. There may also be revenue synergies from merging the two businesses.

"We would expect some execution risk, particularly in integrating the two online businesses, while the potential demands of UK competition authorities are another unknown. An attempt by Ladbrokes to buy Coral in 1998 was blocked due to concerns it would reduce competition. The subsequent migration of the industry to online means we do not expect a deal would be blocked, but the companies could be forced to sell parts of their UK portfolio, especially given the significant overlap between the two companies in high-street locations.

"As many lease contracts would come to expire in the coming years we would expect an acceleration of shop disposals."

A prime example of short the spikes?

More gaps than in Man Utd defense :0)

Ladbrokes completes £1.35bn merger financing

StockMarketWire.com

Ladbrokes has signed a £1.35bn n facility with a syndicate of relationship banks to provide committed financing for its proposed merger with Coral.

The new facility has three tranches and will be available for drawing subject to completion of the merger with Coral. - Tranche A - £600m term facility - October 2016 and, subject to extension options, January 2018

- Tranche B - £400m revolving credit facility - October 2020

- Tranche C - £350m revolving credit facility - June 2019 Ladbrokes' existing £55m December 2016 bank facilities were cancelled in September 2015 and its remaining standalone £350m June 2019 bank facilities will be cancelled as a condition precedent to drawing on the new facility.

The intention is for the £100m September 2022 and the £225m March 2017 Ladbrokes bonds to remain in place following completion of the merger. As a result of this financing, the Gala Coral debt comprising £315m Senior Secured Note 2018, £275m Secured Note 2019 and £812m Senior Secured Facilities 2018, will not be transferred into the enlarged Ladbrokes Coral group at completion of the merger.

Chief financial officer Ian Bull said: "I am pleased that our relationship banks have shown strong support in putting in place a significant size facility at similar pricing to our current facilities. We believe that this facility will provide sufficient liquidity to an enlarged Ladbrokes Coral group following the merger."



Story provided by StockMarketWire.com

Q3 Interim Management Statement

Q3 2015: TRADING IN LINE WITH OUR EXPECTATIONS – STRATEGY IMPLEMENTATION UNDERWAY

Ladbrokes plc (LSE:LAD) announces its trading update for the three months ended 30 September 2015 (the period or Q3):

The chart in post 112 seems to have died. Let's see if this one can stay alive.

Ladbrokes notes rise in Coral earnings

StockMarketWire.com

Ladbrokes has noted that Gala Coral Group has announced its financial results for the fourth quarter and the full year ended 26 September.

Total Coral Group EBITDA was £205.3m - 1% ahead of last year. After adjusting for regulatory impacts and the World Cup, underlying EBITDA was 30% ahead.

Online EBITDA of £56.2m was £6.7m or 14% ahead of last year and was 99% ahead on an underlying basis after adjusting FY14 for regulatory impacts and the World Cup. Online net revenue was 36% ahead, driven by 972k first time depositors.

Despite the introduction of the Point of Consumption tax during Q1, and the increase in MGD and introduction of FOBT high stakes restrictions at the end of Q2, the Group has grown EBITDA in the second half of the year.

Net revenue of £1,005.4m was £60.1m or 6% ahead of last year.

Provisional findings from the Competition and Markets Authority into the proposed merger between bookmakers Ladbrokes and Gala Coral have identified potential competition concerns in hundreds of local areas.

The authority said that in order to resolve the concerns, 350 to 400 shops may need to be sold for the merger to be conditionally cleared - if the provisional findings were confirmed in the final report.

Ladbrokes and Gala Coral Group - the second and third largest bookmakers in the UK by number of outlets - have 2,231 and 1,850 betting shops in the UK respectively.

StockMarketWire.com
Ladbrokes remains confident of delivering full year results in line with its expectations after its fourth consecutive quarter of year-on-year net revenue growth in the third quarter.

In UK Retail, net revenue increased by 1.9%. Ladbrokes said higher OTC margins had a more normalised impact on Q3 OTC staking which was down 4.3% or 3.9% on a like-for-like basis although in football, and the group said it saw staking growth of 17.3% as customers respond to its value proposition.

OTC gross win margin of 16.1% was up 0.6ppts year on year which meant OTC net revenue was broadly flat.

It added: "Staking through BetStation increased by 76.7% and represented c.10% of OTC staking (Q3 2015: c.5%). Machines net revenue grew 4.0% (like-for-like 4.6%) benefiting from our sustained strategy of introducing and promoting lower staking slots and B3 content which is increasingly popular with customers.

"We have maintained the intensity around our multi-channel offer and our UK Retail team have delivered over 120,000 actives since launch in 2015. Multi-channel customers contributed c.11% of sportsbook net revenue in Q3." In Digital, Ladbrokes.com and Exchanges net revenue increased by 32.7%. Sportsbook delivered its 11th consecutive quarter of year on year stakes growth with stakes up 26.2% and actives up 35.6%. Mobile staking increased by 31.6% and now accounts for 78.9% of sportsbook staking. Sportsbook net revenue rose 47.9% benefiting from an increased margin of 7.7% reflecting our focus on the recreational customer.

Gaming net revenue was up 23.7%, our 8th consecutive quarter of year on year growth.

In Australia, on a local currency basis, staking grew 50.6% and revenue increased by 89.6% on the back of actives growth of 42.5%. In European Retail net revenue grew 11.3% (+1.1% on a constant currency basis). In Belgium OTC amounts staked have increased 9.5% driven by the investment in SSBTs and virtual products. In Ireland, OTC staking was up 7.9%.

Chief executive Jim Mullen said: "We've emerged from a busy summer of sport with more evidence that our strategy of appealing to the recreational customer is delivering growth and we remain confident of delivering full year results in line with our expectations.

"Across all our key pillars we have been encouraged by the customer reaction. We have delivered growth for a fourth successive quarter in Group net revenue, and in Ladbrokes.com an eleventh in sportsbook staking and an eighth in gaming.

"In Australia, we've continued to enjoy tremendous success across all measures in the form of improved margin, strong staking and actives growth. "Our margin has been resilient, benefitting from our strategy of focusing on the recreational customer, deploying BetStation across the estate and growing in football. This margin has been in spite of loss-making racing festivals at Goodwood and York; I said at our half year results in August that sporting results would turn against us and in Racing they promptly did.

"However, we did enjoy a strong end to the Euros and a stuttering start to the season for Manchester United and Barcelona has been in our favour. With the Melbourne Cup, an action-packed Boxing Day, the return of the National Hunt season and an intense programme of top level football to come, there remain significant opportunities and risks ahead.

"These results have been achieved by a group of colleagues whose commitment to delivering Ladbrokes' Plan A has been all the more impressive given the ongoing work towards completion of our merger with Coral.

"Following our agreement to sell 359 shops subject to CMA approval, we are close to completion of the deal and look forward to the opportunities it will bring to customers, colleagues and shareholders."

StockMarketWire.com
Ladbrokes has welcomed the Competition & Markets Authority's final approval of the proposed merger with Coral.

The CMA has approved the disposal of 322 shops to Betfred, 37 to Stan James and one shop to Bet21.

Following receipt of this approval, Ladbrokes will publish a prospectus in relation to the readmission of the enlarged group to the premium listing segment of the Financial Conduct Authority's Official List and to trading on the London Stock Exchange.

It is expected that completion of the Merger will take place in the very near future.

Ladbrokes chief executive Jim Mullen said: "I am delighted that the CMA has given approval to our merger with Coral. Both businesses are approaching the merger with good momentum and we are now focusing on completing the merger and delivering on the opportunities it offers."

Change of Name
Further to the publication of the Prospectus in respect of the proposed merger of the Company with certain businesses of Gala Coral Group Limited on 27 October 2016, and in accordance with LR 9.6.19, Ladbrokes plc announces it has today changed its name to Ladbrokes Coral Group plc. The merger is expected to complete on 1 November 2016.

Canaccord comment today:
Fifteen months after its initial announcement, the slow motion Ladbrokes/Coral merger finally completed today. We think that it will be worth the wait, notwithstanding increased UK regulatory scrutiny on the Gambling sector. LAD didn’t get a compelling valuation (3.6x Ebitda, after adjusting for accrued profits) for its forced sale of 360 stores. But it was a relatively low price to clear a deal that offers strategic value and considerable scale in both retail and Online gambling. It also delivers a strengthened management team and substantial cost synergies, which we see at comfortably above management’s projected £65m.
Both LAD and Coral have traded strongly through FY16, supported by a Bookie-friendly European championships, and the early fruits of LAD’s strategic review. Online growth remains impressive (Coral +24% in the 3 months ended September, Ladbrokes +33%, albeit from a low base). This strongly underpins post-merger Revenue/Profit expectations. The Triennial review of Stakes/Prizes could drive tighter regulation (i.e. cut the starting point for the so-called £50 journey) or reduce maximum stakes or machine numbers. The impact of the £50 journey was equivalent to a £30m hit to LAD/Coral profits. But we see greater upside to LAD/Coral’s £65m synergy targets. This amounts to just 3% of combined 2018 costs, versus 11% for Paddy Power/Betfair and 15% for bwin/party. Clearly, there is less direct overlap in Retail (although management expects 60% of its synergies to come from Retail). But even as a % of just LAD/Coral Online costs, the £65m target is just 9%. A target of over £100m seems realistic.
We think the fit looks good, and synergies offer upside. This provides plenty of ballast, at a time of increasing uncertainty around UK gambling regulation. And the impact of the deal on forecasts (with just the £65m of synergies) is compelling. We see FY17 EBITA rising from £118.4m to £313.5m, driving EPS up 47% from 7.9p to 11.7p. And given a commitment to 2x dividend cover, the dividend is ramped up to 5.8p. For FY18, EPS is upgraded 65% to 13.9p. Leverage rises, but it remains a comfortable 2.5x Ebitda in FY17F, falling to 2.0x at end FY18F.
Valuation
The shares are off their highs following recent regulatory concerns, but they are still up by 26% over the past year and 14% over 6 months. On our revised forecasts, it trades on a PER of 11.4x and EV/Ebitda of 8.2x (William Hill on 12.7x/8.8x) in FY17 falling to 9.6x and 7.1x in FY18 (a marked discount to Hills on 11.6x/8.2x). And it offers a 4.4% FY17F yield. We think this looks attractive – if we put the Online business on a 12.0x FY17 Ebitda multiple, Retail is valued at just 5.5x. And we see upward pressure on synergies. Our 165p TP (FY17F EV/EBITDA of 9.5x) represents 24% potential upside. BUY."

This thread will now terminate as the ticker LAD is obsolete. New ticker is LCL.