Ladbrokes Hikes Dividend Payout

LONDON -- Ladbrokes (LSE: LAD.L  ) reported a 49% rise in half-year profits to 107 million pounds, which puts the betting-shop chain on course for annual profits of 170 million pounds. Despite problems at its digital business, Ladbrokes managed to post an 8% rise in group net revenues to 529 million pounds. It has also hiked its dividend by 10% to 4.3 pence per share.

Ladbrokes said: "Strong growth in operating profit in U.K. retail and an improved performance in our European Retail and Telephone businesses was pleasing and more than outweighed a decline in Digital profits, which was greater than expected due largely to a weak sportsbook margin in Q2 and exacerbated by delays in technology."

The disappointing performance in Digital has cost Richard Ames his job as head of product. Ames was relieved of his duties just two days before the company revealed a halving of operating profits at its Digital division.

Ladbrokes added: "We remain committed to our Digital strategy of building a more competitive offer through a combination of on-going investments to enhance our marketing, product and technology."

To ensure an increased focus on its Digital business, the company has promoted its director of IT to the executive committee to ensure technology delivery is given "increased profile and scrutiny."

Digital is likely to be a key battle field between Ladbrokes and other bookies that include William Hill (LSE: WMH.L  ) and Paddy Power (LSE: PAP.L  ) . It is unclear which will be the winner. But in terms of shareholder return, Paddy Power has been a standout success.

The Irish bookmaker has delivered a total return of 1,170% over the last 10 years, which equates to an average return of 29% a year. William Hill is a distant second with a respectable annual return of 9.6%, and the backmarker with a substandard total return of just 2.9% has been Ladbrokes.

This morning's update from Ladbrokes underlines how some companies can disappoint their shareholders. But if you are keen to find out how to discover stock market champions while avoiding stock market donkeys, you can download 10 Steps to Making a Million in the Market" for free right now. But hurry, the report is available for a limited time only.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors of 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

David owns shares in William Hill. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1969477, ~/Articles/ArticleHandler.aspx, 11/27/2014 2:11:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement