Gala Coral announces loss as it prepares for Ladbrokes merger

Gala Coral announces loss as it prepares for Ladbrokes merger

Wednesday, June 8, 2016 Totally Gaming
The operator paid down debts ahead of the £2.2bn deal

Gala Coral paid the price of pursuing its merger with Ladbrokes as it reported a pre-tax loss of £49.8m ($72.4m/€63.7m) in the six months to April 9.

While the company published a series of positive operating figures, its focus on paying off debts ahead of the proposed merger led to a decline in overall performance, compared to the £103.4m profit it made during the corresponding period last year.

The gaming operator said net revenues were £604.9m, which was an increase of 13 per cent on the previous year, while gross profit improved by almost 10 per cent to £413.1m. Earnings before interest, tax, depreciation and amortisation increased 16 per cent year-on-year to £124.6m. The company benefited from football results in the UK and Italy, especially compared with the “adverse football margins” it had suffered the previous year.

While the company said the reported loss was the result of a number of exceptional costs ahead of the Ladbrokes merger, including the paying down of debt, chief executive Carl Leaver was satisfied with its overall performance.

“The underlying health of the business is extremely strong,” Leaver said. “Sportsbook margins benefitted from improved football results in both the UK and Italy, and a good Grand National result helped offset losses from the worst Cheltenham for the industry since 2003."

Revenue generated by the firm’s Galabingo.com site was up 15 per cent, while Coral Connect sign-ups accelerated in the second quarter to over 160,000, which is more than the whole of the previous financial year. The company also highlighted growth within its retail division, with Coral Retail seeing EBITDA rise by 1 per cent to £79.3m, and Eurobet Retail up 71 per cent to £11.8m.

“Coral Connect, our multichannel offer, continues to be a key driver of growth," said Leaver. "Sign-ups in Q2 have accelerated to around 4,000 per week as a result of more targeted marketing.”

TotallyGaming.com says: “Gala Coral performed well over the course of the period, and Leaver’s confidence is backed up by the markets, with Ladbrokes’ share price having soared over the last month.”

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