The Irish retail betting arm of Ladbrokes bookmakers went into examinership yesterday in a move to protect the company from creditors while it restructures the business and prepares to close one in three of its near 200 shops across Ireland.
The process of examinership is unique to Ireland and gives protection for up to 100 days for businesses that have run into trouble but are capable of survival through restructuring or sale.
It appears that Ladbrokes are pursuing the former and given recent retrenchment in the retail betting sector it is unlikely there would be an appetite among either Paddy Power or Boylesports to take on more betting shops at a time when both are focused on the larger and more global markets of online betting and gaming.
The parent company, based in the UK has been buffeted by negative market sentiment in recent years, leading to a change in senior management and the exit of Richard Glynn as CEO.
It nevertheless reported a 5 per cent increase in betting revenue last year to £1.174 Billion, and an operating profit of £98 Million. This was bolstered by a £28 Million profit on the Fifa World Cup but tempered by an £8 Million loss on football betting on St Stephens Day.
The latest Annual report published in February did reference that “We have tasked our international team to undertake a fundamental review of our Republic of Ireland business during Q1 2015 to establish options to take this business forward.
That review has shown that the expansion in number of locations during the boom times was done at too high a cost in terms of rents. That was the same issue that brought down Ivan Yates’ Celtic Bookmakers business in recent years.
Losses last year nudged over €5 Million and the cost base is likely to be reduced through as many as 250 redundancies.
Ladbrokes insist that it is business as usual during the period of examinership and there is no risk to winning bets being paid out, a critical area of trust in the relationship between bookmaker and bettor.
In recent years Ladbrokes has dropped major Irish sponsorships of the Irish Grand National at Fairyhouse and the Irish Greyhound Derby at Shelbourne Park, both of which have been picked up by Boylesports.
