Ladbrokes sharp fall in profits

[Voids]

http://www.scotsman.com/business/med...-cup-1-3506315

[RacingJim]

Tough competition these days, more positive signs with making their offer better and improving their online offering, negative signs obviously being the reduction of affiliate T&Cs including the cookie length etc and a less transparent reporting system.

I'd suggest the most forward thinking companies are seeing the value of affiliates and really going with that, whereas the old fashioned ones (WH, Lads, Stan James etc) are doing all they can to wriggle out of as much affiliate revenue as they can. Definitely a counter-productive strategy.

[thebookiesoffers]

Tough competition these days, more positive signs with making their offer better and improving their online offering, negative signs obviously being the reduction of affiliate T&Cs including the cookie length etc and a less transparent reporting system.

I'd suggest the most forward thinking companies are seeing the value of affiliates and really going with that, whereas the old fashioned ones (WH, Lads, Stan James etc) are doing all they can to wriggle out of as much affiliate revenue as they can. Definitely a counter-productive strategy.

Wouldn't put Ladbrokes and Hills in the same bracket as Stan James tbh

[JackTenSuited]

I'd suggest the most forward thinking companies are seeing the value of affiliates and really going with that, whereas the old fashioned ones (WH, Lads, Stan James etc) are doing all they can to wriggle out of as much affiliate revenue as they can. Definitely a counter-productive strategy.

I'd certainly agree with that! http://calvinayre.com/2014/07/11/bus...rises-to-321m/

[LottoRevenues.com]

By looking at lad's 1 year graph, it looks like a sharp down hill on a ski resort,

https://uk.finance.yahoo.com/echarts...LAD.L;range=1y

If you think it will go back up, now is the time to buy some shares

[-Shay-]

The chart looks to have further downside to me.

[thebookiesoffers]

By looking at lad's 1 year graph, it looks like a sharp down hill on a ski resort,

https://uk.finance.yahoo.com/echarts...LAD.L;range=1y

If you think it will go back up, now is the time to buy some shares

im going to have a little look at investing myself

[RacingJim]

I'd certainly agree with that! http://calvinayre.com/2014/07/11/bus...rises-to-321m/

Good read and definitely proves a point.

[TheGooner]

Interesting that Ladbrokes revenue was actually up 2% - but the drop in profit was directly attributable to operating costs.

Looking at that chart and going for the 5-year graph it's clear that the share price has been here before (2010 to 2012) and if you think that Laddies can get those costs under control then the share is probably a good buy at this price.

[JackTenSuited]

Interesting that Ladbrokes revenue was actually up 2% - but the drop in profit was directly attributable to operating costs.

Looking at that chart and going for the 5-year graph it's clear that the share price has been here before (2010 to 2012) and if you think that Laddies can get those costs under control then the share is probably a good buy at this price.

Affiliate software as 'remarkable' as Mexos doesn't come cheap!!!

[thebookiesoffers]

Interesting that Ladbrokes revenue was actually up 2% - but the drop in profit was directly attributable to operating costs.

Looking at that chart and going for the 5-year graph it's clear that the share price has been here before (2010 to 2012) and if you think that Laddies can get those costs under control then the share is probably a good buy at this price.

Im sure they are going to or have got rid of a load of shops as well, will help in the long run if they can get rid of costly properties. going to have a look tomorrow at the shares. then put ladbrokes at the top of all my sites lol

[grem]

Affiliates are just rushing to Ladbrokes with Mexos software.

[Sherlock]

Affiliate software as 'remarkable' as Mexos doesn't come cheap!!!

Yeah it is unbelieveable.

I think the real profits did not sink by that far, but the "innovative accounting" where you can hide the money abroad through "operational costs", is the cause.

Why the hell should the costs go up and not down with all the innovation and cheaper infrastructure.

To be honest I do not care what is in their accounting books, but how much they pay me. And what is really remarkable is that Bet365 - apparently the most honest company (paying hundreds of millions in taxes and on charity) - pays the most. So the business is probably not all about tax evasion, but more about vision, consistency and trust.

[TheGooner]

Yeah it is unbelieveable.

I think the real profits did not sink by that far, but the "innovative accounting" where you can hide the money abroad through "operational costs", is the cause.

Why the hell should the costs go up and not down with all the innovation and cheaper infrastructure.

Costs go up when you change - at least according to accountants - because :

1/ The company writes off the cost of the old infrastructure - which may still have a large book value but is no zero.
2/ The company buys new infrastructure - and starts depreciating it at accelerated rates.
3/ Development and project costs of building the new systems.
4/ People costs - hiring, firing, redundancy etc.

Having worked with some big companies in building new IT systems you find that the real costs charged to the company are far more than that costs of just building the new system.

[Sherlock]

Valid points. Hard to say how they do accounting.

But still affiliate software and hardware surely goes down and down with prices. It is the same as other areas. To get eshop 10+ yrs ago meant that you had to hire a programmer and he would create it. Today it is free licence and few clicks + hosting is just fraction what it cost before and much faster. Same with affiliate software, especially when we see that almost nothing was improved and for sure @ Mexos.

So if they change the system and their costs go up it only shows incompatence and it shows that their solution was non-optimal.

[TheGooner]

I think that you will see running costs in the future are down - but there is a significant charge in making the change.

Also when implementing internet systems for banners and traffic etc, the cost tend to stay the same because although hardware gets 50% cheaper each year - you seem to have to buy twice as much to cater for doubling traffic!


I think I agree with you - that the management and accounting team have taken this opportunity to write off a whole lot of costs - and that next year we will see higher profits and much lower costs.

[Sherlock]

I doubt the necessary transition costs are fixed costs. Even I am not owning my servers, firewalls etc. I am just hiring them on monthly basis together with service. That is one of the major changes during the last years. Cost effectivity comes hand in hand with all the cloud solutions etc. Not just hardware, but also software is rented and not sold. Fixed costs are more and more past.

If someone will argue they have huge fixed costs because they have to buy a new system, servers etc. that is only one more reason to think their approach is obsolete and therefore too costly. This is the logic I am using here.

With properly used cloud solutions, cdn's etc. the savings are/might be quite remarkable. The same sources are shared by many entities and the traffic is offset. But yes - it is probably hypotetical, because many affiliate programmes incl Ladbrokes still sit in stone ages and their "higher costs" are probably something worse than excuse. It is a crazy reality.

[TheWaiter]

The odds are in the favor in the bookies but it doesn't mean it will always go that way. As mentioned competition is stiff and sometimes they take risks on crazy odds, which sometimes pay out. Over the long term profits should rise, nothing to worry about in my opinion.