UK bookmakers Ladbrokes plc (LSE: LAD) has issued its third profit warning this year and seen its share price fall sharply and partly blamed its disappointing performance on the online digital business it set up in Israel earlier this year with Playtech Cyprus Ltd. (LSE:PTEC), controlled by Teddy Sagi. Ladbrokes said that its online profit would fall far below expectations due to delays in getting its five-year agreement with Playtech off the ground.
In discussing digital earnings, Ladbrokes CEO Richard Glynn spoke of, "a greater disruptive impact than expected from the transition necessary."
Ladbrokes Israel office began operating on May 1 after the agreement with Playtech was signed in March. Meanwhile digital operations are winding down in London with an expected 120 layoffs hitting the morale of the bookmakers' staff. Analysts do not expect Ladbrokes digital operations in Israel to be fully up and running until the second half of 2014.
Playtech's agreement with Ladbrokes to provide consultancy to its online services followed the sale of its 29% stake in rival UK bookmaker William Hill Online to William Hill plc (LSE: WMH) for £424 million in March.
Published by Globes [online], Israel business news - www.globes-online.com - on September 30, 2013
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