Bookmaker Coral (SBR rating B+) has announced that revenue rose 6% to £1 billion ($1.5 billion) in the past year ahead of its proposed merger with Ladbrokes (SBR rating A).
The company’s full-year results to September 26 show that its online arm drove all the growth, with revenues up £65.2 million to £247.8 million ($373 million).
Its retail business was flat, while its Eurobet business – which has become the second-largest online sportsbook in the Italian market after Bet365 (SBR rating A+) – saw revenues drop slightly.
Coral, which trades as the Gala Coral Group, said the figures were positive and noted that sports stakes were up 57.6% on coral.co.uk and up 89.9% on eurobet.it.
It warned that football results had negatively impacted on its retail sales, but that the online arm continues to see “impressive” net growth in sports.
Net revenue on online sports betting grew 68% to £41.9 million ($63 million) in the past year, with stakes up 58% and sports spend-per-head up 31%, “reflecting an improved sportsbook product range, a maturing customer base and the acquisition of higher spending multichannel actives”.
Merger creates UK Super Giant
Coral estimates that its online arm is the fastest-growing of any UK bookmaker, “adding more net revenue than any other listed peer in both cash and percentage terms, and reaching a market share of over 7%”.
Bettors are increasingly using mobile devices like smartphones and tablets when wagering on sports, with Coral reporting that 70% of sports bets it takes are now made on mobile devices.
Gross profit for the Gala Coral Group rose £14.1 million to £699.5 million for the full year, and EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 1% to £205.3 million.
The bookmaker is set to merge with Ladbrokes to form a company that would become one of the world’s largest sportsbooks.
Ladbrokes shareholders approved the £2.1 billion ($3.15 billion) merger last week, despite opposition to the deal from prominent shareholder Dermot Desmond, an Irish billionaire who owns Celtic football club.
The merger is awaiting approval from the Competition and Markets Authority. If approved, Ladbrokes would take on the online, retail and Eurobet parts of the business, and the Gala bingo business will be sold to Caledonia Investments for £240 million.
But the merger is by no means a formality. The two bookmakers tried to merge in 1998, but the competition watchdog blocked it as they are such similar businesses and would take a dominant position in the market.
Recent Industry Deals
The proposed merger comes at a time of great consolidation in the market, with betting exchange Betfair and Irish bookmaker Paddy Power due to merge at the start of 2016, while GVC has snapped up Bwin.party.
Betfair boss Breon Corcoran, who would become CEO of Paddy Power Betfair if the merger goes through, could take home an annual pay package of up to €5.9 million, while his holdings would be worth more than €70 million ($74 million).
Meanwhile Paddy Power boss Andy McCue stands to receive substantial compensation, running to millions of euros, if he decides not to stay with the company.
Sportsbook Review.com will keep readers updated on the industry wheelings and dealings.