Ladbrokes PLC, a group which offers land-based gambling and internet gambling in the United Kingdom and around the world, is scheduled to receive an £80 million ($123 million) tax refund from Her Majesty’s Revenue and Customs (HMRC).
The refund marks the resolution of a long-standing dispute with the HMRC, and is being awarded as part of a settlement agreement between Ladbrokes and UK tax officials. It covers all the outstanding items in the tax years up to December 2007. Broker Panmure Gordon felt the announcement was positive, stating: “This settlement will tidy up and strengthen the group’s balance sheet.”
The announcement came last week as Richard Glynn prepared to start as chief executive, after the surprising exit of Chris Bell. Shares in the company jumped nearly 3% after the announcement, though one analyst for Panmure Gordon is still saying ‘sell’, insisting “the turnaround job for incoming chief executive Richard Glynn will take longer to achieve than the market currently believes.”
Ladbrokes had a rough year. Profits dropped 28% to £191m as the gambling group was hit hard by the global recession. At the same time, they also suffered losses as punters backed more winners than usual.
The group moved its online betting headquarters to Gibraltar last year to escape from the UK tax rate which had climbed to an astonishing 25%, and since the move, things have started to pick up again. Earlier this month the group launched an online sportsbook in France in a joint deal with CANAL+, while simultaneously selling off their Italian operations for a grand sum of €5.25 million. Despite the recent slump, the group still operates some 2,200 betting shops in the UK, and its online poker, casino, and sports betting offerings remain very popular in the UK and abroad.