The Ladbrokes Coral Group PLC (LON:LCL) (LCL.L) share price has fallen over 2% today after it released a trading update. In the 4 months to 29 October, the company’s UK Retail LFL net revenue was 1% behind with LFL OTC stakes performance improving versus the previous quarter to 5% behind the prior year.
A content deal with The Racing Partnership in July meant that there was a return of all horse racing to the Retail estate, with around 80% of the volume lost due to the lack of content having returned. This deal alongside the structural improvements to gross win margins should help to protect the long term profitability of the UK Retail business.
European Retail net revenue was 17% ahead of last year, with European Retail stakes 10% ahead. Digital net revenue was up 12% versus last year, and 15% ahead excluding the Euros. Growth in the company’s Australian division was strong, with sports stakes 41% up and net revenue rising by 50%.
Coral.co.uk continues to perform well in a competitive UK environment, with net revenue up 13%. Galabingo.com also grew strongly in the quarter, with net revenue 10% ahead.
With a dividend yield of 4.8% forecast for 2018, Ladbrokes Coral has a similar dividend yield to other popular income shares such as Rio Tinto plc (LON:RIO) (RIO.L), National Grid plc (LON:NG) (NG.L) and J Sainsbury plc (LON:SBRY) (SBRY.L). Rio Tinto yields 3.5%, Sainsbury’s has a dividend yield of 4.4% and National Grid’s dividend yield is 4.9% at the moment.
In my view, Ladbrokes Coral is making progress with its strategy. It has a diverse business model and seems to have growth potential in a number of markets. This could support a higher dividend, which means it could be a relatively appealing income investment within my ISA for the long term.