Bookmaker Ladbrokes took a pasting at the Cheltenham festival last month, and with 62 days of other race meetings lost to the freezing weather in the first quarter it warned profits this year will be at the lower end of forecasts.
The bookie’s shares fell 9 per cent, or 18.9p, to 188p as it rushed out its trading statement 10 days earlier than planned. Analysts had been looking for profits in a range of £180m to £215m against the £206m it made last year.
Chief executive Richard Glynn said the group made £6m less at Cheltenham than in 2012, including a £2m drop in profits from Ireland as so many Irish winners romped home.
He said: “Nine favourites won and on the last day in particular we got smashed. It is one of the vagaries of bookmaking that you just have to accept. On the Grand National, which was in our second quarter, we made £4m more than we did in 2012.
“So I would say that I’m disappointed but all the more determined to deliver. We will redouble our efforts so that by 2014 we will be producing those profits which we had promised.”
Ladbrokes said it had also been hit by lower spending on the machines in its shops during the first couple of months of the year and lower revenues from high-spending customers in its online casino business.
“The trading environment and economic conditions since the start of the year have remained challenging, which when combined with a number of specific, one-off factors in the latter part of the period, have driven a softer first quarter than expected,” Mr Glynn said.
All of these factors, as well as the rise in gaming-machine tax, mean first quarter operating profits are down by £13m on last year at £37.4m. Overall revenues are down 3.3 per cent.
Mr Glynn said: “Obviously this is a disappointment but Ladbrokes is still materially stronger as a business than it has been for several years.”
He said he is looking for an upturn in digital revenues in the second half of the year.
Nick Batram of broker Peel Hunt said: “A downgrade now was not unexpected although the scale is slightly more than anticipated... but, in a sector where there is considerable corporate activity, now is not the time to get off the Ladbrokes horse.”