Strong quarterly from Betfair

The UK online gambling group Betfair plc has posted its interim management statement for fiscal period Q3 and FY 2015 ended 31 January 2015, reporting an impressive set of key performance indicators that includes:

* Revenue up 20 percent to £114.6 million, representing the fourth consecutive quarter of double-digit growth;

* Revenue from sustainable markets up 27 percent to £92.9 million;

* Active customers up 35 percent to 760,000 (up 50 percent in sustainable markets);

* 80 percent of UK Sportsbook customers are now using mobile, driving 96 percent growth in mobile revenues;

* EBITDA up 17 percent to £23.6 million (up 51 percent excluding UK POC tax) The impact of this duty in Q3 was approximately £7 million; The EBITDA margin was 20.6 percent (Q3 FY14: 21.2 percent). Excluding the impact of the additional gaming duty, the EBITDA margin would have been approximately 27 percent.

* Acquired HRTV and entered into a long-term content deal in the US;

* Full-year FY15 EBITDA now expected to be between £113 million and £118 million.

* In December 2014, Betfair announced the return of £200 million of capital to shareholders and subsequent consolidation of its share capital on a 7 for 8 basis. This was completed in January and as at 31 January 2015 the group’s cash balance was £99.7 million, excluding customer funds held off balance sheet in trust.

Chief executive officer Breon Corcoran commented Thursday:

“This was another strong quarter. Betfair has momentum and is continuing to gain share in its key markets by acquiring and retaining customers through product differentiation, attractive odds and generous promotions.

We are now two years into a programme of substantial product and marketing investment and this is delivering sustained growth.

Our in-house development capability is allowing us to develop new products quickly and efficiently. This is particularly evident in mobile, where our proprietary technology gives us an edge in the largest and fastest growing channel.

We are entering one of the key periods in the sporting calendar and are focussed on finishing the year strongly. We recently launched a major new marketing campaign (“Tap Tap Boom”) and our headline Cheltenham Festival offer is Betfair’s most generous yet.

Beyond that, we are set for record levels of political betting around a closely contested UK General Election. Betfair’s Exchange is the go-to platform for those either wishing to have a bet on, or understand the most likely outcome of, the election.

The strong Q3 performance and the continuing momentum we are carrying into the final quarter mean we now expect full-year EBITDA of between £113 million and £118 million”.

Sports revenue growth (+16 percent) continued to be led by mobile. In recent months, 80 percent of UK Sportsbook customers placed a bet using a mobile device and the channel accounted for the majority of new activations, the management statement notes.

Gaming revenue was up 30 percent, driven by an increase in the number of Sports customers using these products for the first time and by increased mobile usage. In January 2015, for the first time, the majority of Gaming customers used mobile.

Betfair US revenue was up 25 percent (constant currency), driven by a 17 percent increase in TVG revenue and growth in Betfair’s online casino in New Jersey.

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