Ladbrokes I-Gaming to Miss 2010 Earnings Target

In the four months to April 30, Ladbrokes said e-gaming net revenue fell 2 percent over 2007 and that pre-tax earnings forecasts for its online gambling arm would not be met.

"Whilst we remain confident of the outturn for 2009, the weaker economic conditions and softening yields make it unlikely that we will achieve the growth necessary to reach our previously stated profitability target (between £80 and £90 million) in 2010," the company said in its interim management statement Thursday.

Ladbrokes, whose shares were down 8.45 percent in late-afternoon trading, said a positive performance in online games was offset by weakness in sports betting margins and poker.

Despite having migrated its poker business to the Microgaming Network in early February -- and having received a 14 percent jump in active players thereby -- player yields declined.

Overall, the Cheltenham Festival in March played havoc with the company's result and proved highly profitable for many of its customers, it said.

In April, group gross win rose 5 percent (net of high rollers); but for the four-month period, gross win was flat against last year's comparatives.

Group profits fell 34 percent on 2008 reflecting March's abnormally high gross-win margin and "unfavorable cost phasing in eGaming against the prior year."

"This is part of the ebb and flow of bookmaking, not a sign of a structural problem," Ivor Jones, an analyst with Evolution Securities, said in a note to clients Friday.

Profits from high rollers fell 37.5 percent to £25 million during the period.

"While it is difficult to predict future staking levels in the current economic climate, the general resilience of our business and strong cost control gives us confidence in the outturn for the full year," Christopher Bell, the company's chief executive, said in the results statement.