Title: Financial Analysis of Ladbrokes 1) Ladbrokes is the worldâ€™s leading fixed odds betting company. The company was established as a partnership in 1886. The business listed on the London Stock Exchange in 1967. The company also diversified into hotel business by opening hotels and purchasing Hilton International Hotels in 1987. In 2006, Hilton International was sold to Hilton Group and now Ladbrokes plc focuses on betting business only. Ladbrokes reaches its customers through the following four core routes:
The business faces numerous competitors in different segments. They are few large operators of betting shops but Ladbrokes group is a well established leader. The most volatile business segment is the internet betting which was impacted by the change in US laws which made internet betting illegal and this action might be followed by other European countries. Football pool business is declining in its share and chances of its revival are less. The company faces following main risks:
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The latest full year accounts are available for the year ended 31 December 2005. Appendix I shows the summary financials. The profit and loss results compare the change in financials over the year from continued business only to give a better idea about future prospects and valuation. The revenue from continued operations increased by 13.6 % to Â£11,505 million. EBITDA is low because winnings are distributed from revenues only. Profit after tax increased 2.5 % to Â£196 million. The total number of outstanding ordinary shares is 628.13 million. Ladbrokes share price is 452.25 pence giving it a market value of Â£2.84 billion. Ladbrokes share price has moved upwards significantly in the last four months on back of grant of new licences to open betting shops across Europe and good trading for the ten months ended 31 Oct 2006. Profits from the continuing operations increased by 5 % in the ten months period ended 31 Oct 2006.
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