Lads Coral CEO: Dual-brand strategy is boosting our margin
Jim Mullen hails the trading and acquisition benefits of two brands on a single platform
Ladbrokes Coral CEO Jim Mullen has hailed the positive impact of a dual-brand approach on the group’s sports betting margins.
The Ladbrokes and Coral brands, which now sit on a single trading platform, reported a 25% increase in H1 sports revenues last week, with a 9% margin.
Morgan Stanley highlighted the high margin, adding “It suggests recent peer commentary around poor sports results may be a company-specific rather than having an industry-wide impact.”
However, speaking to EGR Intel, Mullen said football results at the end of last season were indeed “bloody tough”, but the firm’s ability to operate two distinct acquisition and trading strategies from a single platform was driving growth and protecting margin.
“I’ll give you an example,” Mullen said. “At last week’s Open, Coral went aggressive on each-way places, to attract the more recreational punters while Ladbrokes went aggressive on pricing to get those sophisticated customers doing a pricing sweep.
“It’s a prime example of the flexibility you have with two customer bases using two brands,” Mullen added. “You can manage your risk, you can run different promotions, you can focus on growth with one brand and profit with another. So that’s why our sportsbook net revenue is up 25%, or 34% excluding the Euros, and that’s one of the reasons we are confident in our margin capability.”
Ladbrokes Coral CEO Jim Mullen
Elsewhere, Mullen noted the hidden benefits of the merger, including the “cross-learnings”.
“The upside of getting something wrong on one brand and the ability to learn and make it right for another is one of the real surprising benefits of this merger, Mullen said. “The cross learning is significant.”
Last week, the firm also surprised analyst by increasing its predicted synergies for 2019 from £100m to £150m, with new savings in procurement and IT.