BOOKMAKING giant Ladbrokes claimed yesterday it was on top of its debt management as it also laid bare the frenzied bank lending of a couple of years back.
Speaking as the group unveiled a near 1 per cent rise in underlying operating profits to £243.8 million in 2008, Scots-born finance director Brian Wallace said Ladbrokes was "in control of our destiny" on its debt management.
Wallace, who returned
to the bookmaker from hotels group Hilton two years ago, said at that time he was "besieged" by bankers urging the company to take on more debt.
He said: "They were saying 'if you don't gear up (the balance sheet] you will be taken over by private equity.' It was absolutely bonkers."
Chief executive Chris Bell said Ladbrokes, with some 2,100 shops in the UK including 300 Scottish outlets, had resisted the bankers' blandishments.
"Not being clever about it, but we just did not think it was right at the time. With hindsight that has certainly been the right thing," Bell said.
Ladbrokes revealed yesterday that in 2008 it signed £185m of new committed bank facilities and extended £400m of facilities to 2013.
Bell said that gave the company a cushion of more than £500m of undrawn bank facilities to handle the current "challenging" trading climate.
Ladbrokes said 2009 had got off to a tough start because of "unusually high levels" of weather-related UK and Irish horserace abandonments – 58 against 33 a year ago.
Cancellations have included a number of high-profile Saturday meetings.
More than 200 shops were also unable to open during the recent severe weather, but Ladbrokes said the amount left by losing punters – its gross win – still increased by 1 per cent in the first six weeks of the year.
In the UK retail business – the shops – gross win was up 4.7 per cent at £774m in 2008.
The company's e-gaming business increased revenues 20 per cent, reflecting marketing investment in ladbrokescasino.com and ladbrokesbingo.com.
Bell said a particular success story had been the launch of OddsOn last June, the first supermarket-style "loyalty card" in a British bookmakers. The cards offer odds enhancement, win-bonuses and free bets for various levels of points accrued via over-the-counter betting.
More than 300,000 cards are now being used regularly, with more than 445,000 free bets and bonuses, worth £8.6m, being so far enjoyed by customers.
"Getting something for what you do already is very powerful (merchandising]," Bell added.
The company also said it had continued its push into Italy and Spain, and was still considering possibilities in the Chinese market where it has a joint venture with AGTech.
The dividend is held at 9.05p per share. Ladbrokes's shares closed up 1.5 per cent at 184.5p yesterday.
