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Are the Financial Times writers overly bullish on gambling companies’ stocks?
This entry was posted in Betting, Finance, Gambling and tagged Betting, betting market, Finance, financial analysis, Financial Times, Gambling, gambling company stocks, Internet betting, Internet gambling, stock markets. Bookmark the permalink.
3 Responses to Are the Financial Times writers overly bullish on gambling companies’ stocks?
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Shares in online betting bellweather stock Playtech are off 26% after the company warned that it was trading below market expectations. Deutsche Bank was subsequently forced to cuts its overly bullish 2009 adjusted EBITDA forecast to 96 million euros from 124 million and its 2010 prediction to 111 million euros from 147 million.
Other gambling stocks fell back in sympathy with Hills, who recently entered into a joint-venture with Playetch, off 5%.
On 6 August 2009 Ladbrokes plc announced its results for the half year ended 30 June 2009. Group net revenue was down 6.6% to £504.4 million (H1 2008: £539.8 million).
Group operating profit(1)(2) fell 25.6% to £98.6 million (H1 2008: £132.6 million). Profit before tax(3) down 3.9% to £131.3 million (H1 2008: £136.6 million). The company subsequently announced that it was moving its online betting operation offshore.
On 4 August William Hill PLC announced its results for the 26 weeks ended 30 June 2009.
Net revenue was down 9% over-the-counter in retail, 18% in telephone and 1% in the online Sportsbook area. Gross win in retail was down 6% compared with the same four weeks in 2008 and the company also reported a gross win margin at 15.7% against 16.4% in 2008. Profit after tax was £67.8m (2008 – £79.7m). Profit after tax but before exceptional items was £76.7m (2008 – £81.7m). The company said that underlying operating profit in the 26 weeks to June was £131.8m – down from £145.1m the previous year. William Hill also announced that it was moving its online business offshore.
These results very clearly undermine the misguided view that traditional bookmaking companies are resilient in the face of a global recession. The Financial Times journalists are guilty as charged; they failed to understand the industry and they were too quick to swallow the bullshit that was spewed out by the industry’s spin doctors and benefactors.
Thanks. You could write up a post about all that.