Heavy betting during the first two weeks of the World Cup failed to lift profits at Ladbrokes, which continued to grapple with its online business and closed shops across the country.
The bookmaker is struggling to catch up with its rivals in online gambling. Last year it signed an agreement with Playtech, the Israeli company that had transformed rival William Hill's digital service. But it has taken a year to integrate the new technology, which has yet to reap the promised rewards.
Digital earnings were down 72% from an already low base. Ladbrokes' online business made only £3m in operating profits in the six months to June, compared with William Hill's digital business, which made £92m over the same period. Digital makes up 4.4% of Ladbrokes' operating profits, against 52% at William Hill.
The Ladbrokes chief executive, Richard Glynn, said: "We said a few years ago that Ladbrokes needed to dramatically increase its presence in the digital and mobile world. I think I've been very upfront about the fact that it's taken us a while to do that. The road has been bumpy at times. The product didn't match the brand." He said the company set a deadline of the World Cup to resolve its online issues. "We delivered that. The focus is on translating that into growth."
Betting on the World Cup rose 20% compared with the tournament in 2010, largely as a result of Ladbrokes increasing its focus on football.
Glynn said he did not believe betting was becoming more mainstream. "It's still a pastime enjoyed by millions of people. I don't think its becoming more or less prevalent."
He sees a shift in behaviour to betting on smartphones and tablets, rather than growth of gambling in general. "It's a change in pattern. The 18- to 34-year-old male comes into the shops for the social experience and uses mobile to play."
Betting on mobile more than doubled in the first half. Glynn said: "Mobile is the battleground now – there is no doubt about it. We only launched [our mobile product] six months ago. It is now bigger than desktop in digital. It is growing at a very good rate."
Ladbrokes took a £14m hit from closing 29 betting shops in the first half. By the end of July it had closed a total of 46 shops and is on track to meet its target of closing 50 this year, following a tax rise on betting machines announced in the last UK budget.
Pre-tax profits sank 50% to £28m in the six months to June, while revenue inched up 4% to £589m. Glynn said: "They're entirely in line with what we expected. We always said [the first half] was about delivery and [the second half] was about growth. The operational results were encouraging; there is a lot more to play for." He says the company is on track to meet market forecasts for full-year operating profits of £130m-£132m.
The shares rose 4% to 135.7p.
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