Ladbrokes in Strong Financial Position with New £500 Million Debt Facility

Earlier this week Ladbrokes, the second largest bookmaker in the UK, announced that they have agreed a new five year £540 million debt facility with their banks. The new facility will mature in 2025 and will be replacing their existing £560 million facility which was due to mature in 2025.

A debt facility is a financial assistance program for a company which is essentially the same as a loan. Companies will often take different debt facilities as they can vary between committed and uncommitted.

According to the company estimates, the new blended rate of interest for the group will be around 7.5% in 2025. Ian Bull, the Chief Financial Officer at Ladbrokes said that this new facility combined with their "proven track record for strong cash generation" will mean that the business is on a very strong footing as they "continue to invest in our plan to reinvigorate Ladbrokes."

This year has seen two setbacks for Ladbrokes, suggesting that they were not in the strongest financial position. They pulled out of talks to buy their online rival Sportingbet and also cancelled takeover discussions with 888 early in the year.

However, in May Ladbrokes did report an increase in third quarter underlying operating profits. This was helped by a significant rise in winnings on gambling machines. They subsequently announced that they are very confident that they shall meet their full-year forecasts even though there is a squeeze on customer spending.

The company's shares have also been on the rise over the last three months, since May they have risen 2.6%. Last week they closed on 130.80 pence per share which values the company at £1.2 billion.