Solid half-year for Betfair

Online gambling group Betfair has unveiled half-year results to the end of October 2010 showing an upward trend in key performance indicators.
The group reported revenues up 12.3 percent to GBP188.5 million, whilst EBITDA hit GBP31.2 million, soaring 24 percent, with underlying profit after tax up 49.8 percent to GBP14.4 million. The company maintained its debt-free status, and holds GBP178.2 million in cash.
However, profit after tax was down 12.7 percent to GBP 6.8 million following the deduction of net exceptional costs of GBP14.7 million primarily associated with the company’s recent IPO on the London stock exchange.
Customer funds held on deposit in separate ring fenced accounts at period end were GBP288 million, with active customers up 31.1 percent to 654,000.
Chief executive David Yu said: “We are pleased to report our first set of results as a listed company, which cover an exceptionally busy period. We have made significant progress throughout the group pursuing our key growth priorities of:
*     building on our leadership in sports betting;
*     continuing to expand our product portfolio and cross-selling these products to Sports customers;
*     taking advantage of the proliferation and convergence of new channels;
*     continuing our geographic expansion; and developing our platform to address new markets and new verticals.
“We also completed a listing of Betfair’s shares on the London Stock Exchange, an important development which we believe will enable us to grow more quickly than we could do as an unlisted business.
“From a trading perspective, we delivered double digit revenue growth in the period driven by a strong performance during the World Cup in the first quarter. Growth in the second quarter was moderated by more challenging conditions, particularly in horse racing and poker, which together offset robust performances in football, other sports and Games.
“An increase in active customers in the six month period of more than 30 percent was generated by a disciplined marketing campaign. The increase of over 25 percent in Core Betfair Adjusted EBITDA demonstrates that our planned margin progression is on track with marketing expenditure in particular returning to historical levels.
“Trading in the third quarter began on a stronger overall trend than the second quarter in Sports, again led by football. Recent weather conditions in the UK and Ireland, however, caused a number of race meeting cancellations, moderating overall growth rates in the quarter to date. Games growth has strengthened but poker has continued to show significant year-on-year declines following its migration to the Ongame network. In the second half, we will continue to improve our customer offering and address challenges in racing and poker with a number of product enhancements and initiatives.
“We remain confident that our Core Betfair business is on track to deliver Adjusted EBITDA in line with our expectations for the current financial year. Looking further ahead, we believe that Betfair’s unique product proposition and well-invested technology platform position the Group strongly for growth in the years to come, together with the potential for significant margin enhancement in Core Betfair.”

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