Betfair posts positive update

 

 

Sportsbetting exchange and online casino operator Betfair has released an unaudited trading update covering its financial performance for the twelve months to the end of April and showing that it expects to report overall revenues of around £387 million.

 

 

 

Last month saw Betfair reject a preliminary takeover approach from private equity firm CVC Capital Partners Limited that was reportedly worth £911.7 million while it has now declared that it anticipates bringing in annual earnings before interest, tax, depreciation and amortisation of £73 million.

 

Betfair stated that both of these estimated results were ‘above the top end of our guidance range’ while it made ‘excellent progress’ in the delivery of a restructuring plan that has seen cost savings increase by £10 million year-on-year to around £30 million while employee numbers were reduced by about 500.

The firm stated that its cash balance as of April 30 stood at £168 million, which is an improvement of 42.3 percent year-on-year, while its UK customer acquisitions rose by 108 percent when compared with the previous twelve-month reporting period.

 

“We have achieved much in the five months since we set out our strategy in December,” said Breon Corcoran, Chief Executive Officer for Betfair.

“The business has gone through significant change. A new management team is in place and a wide-ranging restructuring has been completed ahead of schedule allowing us to increase our cost savings substantially. At the same time, the pace of product delivery has accelerated including the development and launch of a new sportsbook within three months.

 

“The strategy is working. We have had early success and shown that the combination of the exchange and sportsbook can deliver a sustainable competitive advantage. In the last couple of months, our sportsbook-led acquisition focus has resulted in improved marketing efficiency and a two-fold increase in the number of UK customer activations. We are confident this will enable us to accelerate revenue growth in our most important market and I believe we can grow in-line with the market in the medium term.

 

“While we are rightly focusing on regulated jurisdictions, primarily the UK and Ireland, I firmly believe there is a significant international opportunity. We have recently seen positive regulatory momentum in Italy, Spain and the United States. In addition, revenues from countries where we have ceased marketing is proving relatively resilient due to the uniqueness of our exchange.

 

“We intend to use our strong balance sheet to pursue a strategy of targeted acquisitions to add further domestic scale, achieve geographical expansion and close product gaps.”

 

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