Ladbrokes reveals £213m losses following Coral merger
Bookmaker Ladbrokes has revealed bottom line losses of more than £200 million after it was hit by the costs of its merger with Coral, but said it was ramping up savings targets from the deal.
Ladbrokes Coral said one-off costs of the £2.3 billion merger completed last November pushed it into the red by £213.3 million in 2016, against pre-tax losses of £46.5 million in 2015.
Boss Jim Mullen insisted the group had enjoyed a "very successful start" since the deal and outlined aims to hike costs savings to £100 million a year by 2019, from the £65 million previously earmarked.
He said the extra savings would come from stripping out costs in IT and back office areas which have been doubled up since the merger, rather than in job losses.
The group has already offloaded 359 betting shops to see the merger clear competition hurdles.
Proforma results for the merged group also showed a 22% rise in operating profits to £264.3 million for 2016 thanks to an 11% increase in revenues to £2.35 billion.
Mr Mullen said the group was now "looking to the future".
"The merger was the start of a journey," he added.
He said the group planned to expand further overseas and focus on using its "significantly increased scale in technology" to develop new products.
The group described 2016 as a "game of two halves" for sporting results, having suffered a dismal December for horse-racing and football, when a number of favourites came out on top.
Ladbrokes said earlier this year it suffered its worst week of the year for football in December, with nine of the 11 domestic favourites winning over two days and all four of the top Premier League teams winning on Boxing Day.
It was also impacted by customer-friendly horse-racing results, saying it was a "year to forget as the worst Cheltenham Festival in living memory combined with very poor results at the Royal Ascot, Goodwood and York Ebor meetings".
But this year's Cheltenham Festival "went the bookmakers' way", according to Ladbrokes.
In a trading update since the start of this year, it added that January was "generally a positive month", with Roger Federer winning in the Australian Open tennis tournament among other upsets.
Trading overall is slightly ahead of a year earlier in a "mixed" new year so far, it said.
Shares fell 2%, although analysts at Numis Securities said the update on recent trading was "reassuring".