Ladbrokes Coral Witnesses Increase in its Digital Sector
Ladbrokes coral is one of the betting giants in the United Kingdom market, and it has stated that despite the lackluster sporting season this year, the company still managed to pull off encouraging numbers at the start of 2017. The gambling operator posted an increase of revenue as well as profits for the first half of 2017. The group Ladbrokes Coral was a result of a merger between Coral and Ladbrokes; this occurred last November.
The merger was estimated to be worth 2.3 billion English pounds. The merger managed to continue seeing an increase in the digital division. On the other hand, the group continued to see growth in its online section but the revenues from its retail shops declined in the UK. Ladbrokes Coral, just like other gambling companies in the country shifted their primary focus towards internet gambling. Companies including Ladbrokes Coral did that to protect themselves from the expected crackdown by the UKGC and the UK government on the FOBTs (Fixed Odd Betting Machines).
Ladbrokes Coral Releases Results for 2017
The company has posted an increase of one percent in the revenues of the group that reached 1.2billion English pounds on a proforma basis. The numbers include the trading that happened at the two companies before they completed the merger. The operating profits of the company increased by seven percent to reach 158.2 million pounds for the six months that ended in June. As for the digital revenues, they rose by seventeen percent to reach 374.5 million pounds. The company said that the horse racing section proved to be quite beneficial to the bookies this year so far, and this is thanks to the results that are going in the bookmakers’ way at Ascot and Cheltenham.
On the other hand, the company took a hit after Newcastle United managed to grab the Championship title just at the last minute. The company stated that the goal that Jack Grealish scored cost the company more than 1.5 million English Pounds. Ladbrokes Coral also made a statement regarding its current trading, and it stated that the net revenues in the seven weeks that led to the 20th of August were six percent more than the same period of last year. As for the digital revenue, they witnessed an increase of fifteen per cent, but the retail revenue decreased by one percent.
As for the shares of the FTSE 250-listed company, they rose by 2.2 per cent in early trading. Also, they were 1.2 percent higher than last year’s. The company also announced that their interim dividend of 2p was quite along the interim results, which increased from 1p back in 2016.
Ladbrokes Coral Comments on its Results
Jim Mullen, the Chief Executive of the group, stated that Ladbrokes Coral continues to achieve excellent financial and operational progress. He also added that they entered 2017 with high hopes and ambitious targets for its first half. The company aimed to substantially finish the integration of the teams and to migrate UK Digital to one single platform. Jim Mullen added that the synergies resulting from the merger would indeed deliver better results in the full year.
Neil Wilson from ETX Capital Discusses the Financial Reuslts
ETX Capital’s senior analyst, Neil Wilson, stated that after a bad year in the racing section, the bookies finally got a better year in the horse racing section with a lot of good results, in particular at Cheltenham and Ascot. Neil Wilson also stated that the outlook for the company remained vague with the possibility that the UK government might end up slashing down the maximum stakes of the FOBTs from 100 pounds to just 2 English Pounds. The decision will become clearer when the government releases the industry review and makes it public, which is going to happen in November.
He also said that it all depends on the pressure that the Labour party can put on the government; especially after the Conservative party lost its majority. The Labour party has been pushing for a maximum bet of 2 pounds. Such limit, if it is applied, is going to result in great problems for the bookies that didn’t feel the full effect on the share price decline of the bookies in the last year. The real question is, will the government finally cave in because of that pressure? The tax revenues from the bookies are significant, and also, there are a lot of jobs that are tied up with these shops. The government will surely not want to lose the tax money, especially now, which means that the government might implement more modest reduction when it comes to the maximum FOBT stakes.
888 Holdings Comments about Value Added Tax
888 Holdings is one of the biggest internet gaming and gambling operators that offers its services in many regions and jurisdictions. The company stated that it is still not sure about its liability to value-added tax before the introduction of the new place-of-supply rules for any electronic services within the European Union. As per the report of the company that covered the six months that led to June of 2017, the company showed its uncertainty whether the value added tax (VAT) is due in respect to some services that the group offered to clients in Germany before 2015.
The report also stated that these uncertainties are in respect of determining the place of supply of some or even all of the services that the group offers before 2015, and insofar as the location of supply to be Germany, and whether the imposition of the VAT on such services is lawful or not. Since January of 2015, the EU started to introduce stricter rules to ensure the taxation of all B2C (Business to Consumer) supplies of telecommunication, electronic services, and broadcasting according to the location of the client.
So the companies can ensure the taxation of the services, all non-EU and EU businesses will have to determine the current status of their customers, whether are they non-taxable or taxable. They will also have to ascertain the location of the client, whether in the EU or if they are outside of the European Union. If they are in the EU, the operator must identify in which state.
888 Holdings Responds to the Taxation Claims
The company responded to the Tax inquiry that it had given data regarding all services they offered before 2015 to enable the tax authorities to create their point of view relating to the possibility of the VAT liability. The company estimated that for some services, they would pay 45.3 USD. For other services, for which the company believes that a payment is not applicable, the company estimated the VAT for such services to reach 18.5 USD. On the other hand, the company believes that based on the legal advice it received, no such taxes will be applied. It also plans to defend that position in court if legal authorities require them to pay such taxes.