Ladbrokes has insisted its £2.2bn merger with Coral was moving forward smoothly, gaining from higher-than-expected savings, despite one-off costs from the tie-up causing the bookmaker to fall to a heavy loss over 2016.
The combined entity, newly named Ladbrokes Coral, said it had enjoyed a “successful start” since the transaction was completed in November last year.
Ladbrokes shares fell 3 per cent in early morning trading.
Sporting results were described as a “game of two halves”, with a year of football surprises such as Leicester City winning the English Premier League title and Portugal’s victory in the European Championships helping to offset “customer friendly” horseracing results.
On Tuesday, it reported a set of unaudited proforma results which revealed trading for Ladbrokes PLC and the Coral Group for the ten months to 31 October 2016, and results for Ladbrokes Coral Group PLC for the two months to 31 December 2016. Revenues increased 11 per cent to £2.35bn, while operating profits increased 22 per cent to £264.3m.
The company also forecast higher “cost synergies” from the merger, expecting yearly savings to rise from £35m in 2017, to £90m in 2018 and £100m in £2019. However, the group reported an overall pre-tax loss of £204.3m last year, due to one-off costs from the tie-up.
“As a management team we are now looking to the future,” said Jim Mullen, chief executive of Ladbrokes Coral.
“We are focussed on delivering on the full potential of the merger through the strengths of the Ladbrokes Coral brands, enhanced scale, operational efficiencies and leveraging the best of both businesses.”
In a trading update for the period between the start of this year and March 19, Ladbrokes Coral said upsets such as Roger Federer’s victory in the Australian Open tennis tournament, and this month’s Cheltenham Festival, in which 23 or the 28 races “went the bookmakers way,” has helped trading to be slightly ahead of its position at the same point last year.