Shares in Ladbrokes climbed over 5% early on Tuesday (23 February) even though the bookmaker swung to a pre-tax loss in 2015, on the back of higher gambling tax and a sharp increase in exceptional items.
In the 12 months to 31 December 2015, the FTSE 250 group posted a £43.2m (€55.2m, $61m) pre-tax loss compared with a £37.7m pre-tax profit in the previous year, as higher operating expenses and exceptional items worth £99.3m offset an uptick in revenue, which grew 3.2% year-on-year to £1.2bn.
The group said exceptional items comprised £58.3m worth of impairment following the review of its UK retail and Ireland shops and software, £19.8m related to losses on the closure of shops in both countries and £17.6m related to its proposed merger with sector peer Gala Coral.
The deal has received shareholders approval and remains on track, Ladbrokes said, adding it expects to receive preliminary findings from a phase two probe by the Competition and Markets Authority by late April 2016.
Meanwhile, the bookmaker indicated it remained focused on reaching and possibly exceeding its financial targets for 2017. "While it is pleasing to report that after two quarters we have made a good start, we are only at the beginning of the journey," said group chief executive Jim Mullen.
"Therefore, 2016 will see the same focus on winning more recreational customers, excellent operational delivery and a performance driven approach as the basis for delivering on our clear 2017 financial targets."
Ladbrokes added it undertook a "short and intense" internal review and outlined a three-year investment programme to build its UK retail, digital and Australian recreational customer base in July. The plan, however, forced the group to cut its full year dividend 66% year-on-year to 3p a share, as it sought to address a need for heavier investments in its business.