Coral report £25 million in losses due to overrunning exceptional costs ahead of merger
Published on by Becky M.
Coral are a company that seemingly can’t seem to stay out of the news as of late, for both good reasons and bad. In what will most likely be the final financial update from Coral as a private firm, it seems that they are heading into the upcoming merger on a low note. This is because in spite of the company showcasing top-line metric growth, exceptional costs have weighed the company down, resulting in a £25 million loss.
Corporate Profits Down
With the upcoming £2.2 billion merger with Ladbrokes all but sealed, in its Q3 2016 performance update, Coral declared that net revenues are up 10% to £264 million. What has driven up the figure is the notable increase in player activity, along with improving football-betting margins. However, for all the positivity, Coral have run into a brick wall as of late. Exceptional costs of £26 million that have been attributed to the upcoming merger pushed corporate profits down into the red, with losses hitting £25.6 million. Considering that the merger is right around the corner, with increased costs forthcoming, the posted losses will not make for pretty reading.
New Player Protection Measures
Speaking about Gala Coral’s corporate performance, Carl Leaver (Gala Coral CEO) said, “Online customer acquisition volumes during the Euro 2016 football championships were encouraging. As in the 2014 World Cup, Coral did not advertise on TV, instead focussing marketing investment on channels where we see a positive return. Our predictive models indicate that the value of customers acquired during the Euros is around double the levels achieved in the 2014 World Cup. Combined with very competitive costs of acquisition, this will drive impressive returns on our marketing investment.” He also addressed the brand’s dip in form, “Whilst we were pleased with our on-going online net revenue growth of 19%, it is worth noting, as highlighted at our H1 results, this growth rate was held back by new regulatory requirements, including teething problems around the introduction of new player protection measures.”