Strong half year from Betfair

Online betting and gaming group Betfair unveiled strong first half figures for the period ended 31 October 2011 this week, with underlying after-tax profits up 43 percent at GBP 20.6 million.

Underlying group revenues rose 1 percent to GBP 191.3 million and adjusted EBITDA was up 36 percent at GBP 42.4 million.

On a reported basis revenues were down 10 percent; adjusted EBITDA was up 13 percent; and after-tax profits were up 156 percent at GBP 17.4 million.

Financial highlights included:

* Core Betfair revenue of GBP 170.3 million, with 12 percent year-on year growth in Q2

* Core Betfair adjusted EBITDA up 26 percent to GBP 44.6 million

* Group underlying earnings per share up 43 percent to 19.5 pence. Interim dividend proposed of 3.2p pence per share

* GBP 23.7 million returned in share buyback to date

Operational highlights included:

* Strong Exchange performance: Q2 non-risk revenue up 20 percent year-on-year

* New mobile products drive growth: 16.2 million bets (up 103 percent) and GBP 9.1 million of revenue (up 88 percent) in H1

* Encouraging current trading: Core Betfair revenue up 13 percent in Q3 to date

* New website to be launched shortly: delivering much improved speed, reliability and search functionality

In his last report as CEO Betfair, David Yu said:

“I am pleased with our performance in the first half of the year, with record revenues and profits. After a solid first quarter, we delivered a strong second quarter with Core Betfair revenues up 12 percent. These results were driven by an excellent Exchange performance following a very positive start to the football season and improved monetisation of activity.

“Mobile betting has continued to grow strongly in the first half, with double the number of mobile bets placed compared to the same period last year. We have continued to make progress in the third quarter, with 41 percent of UK Exchange customers placing a mobile bet in November, driving mobile revenue to around 9 percent of Exchange revenue.

“We are continuing to focus our investment in the product and will shortly be introducing mobile gaming as well as further updates to our existing mobile sports betting applications, leaving us well placed to deliver further growth from this important channel.

“We have maintained our positive momentum in the third quarter, with Core Betfair revenue up 13 percent against the prior year. Whilst the economic environment remains uncertain, we expect to make further progress in the second half and remain comfortable with the outlook for the financial year.”

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