Betfair revenues on the up

Betfair has seen a slight rise in revenues of 2% to £393.6m but its profit before tax figure has shot up to £61.1m, compared to last year’s reported loss of £49.4m. It has been a tough couple of years for Betfair as it has switched its operations to concentrate solely on regulated markets, but today’s annual results suggest that the firm has made it through the worst of time.

Breon Corcoran, Betfair’s Chief Executive Officer, said: “Our strategy is working. The emphasis on sustainable revenues and our product and marketing investments are paying off, resulting in record revenues and profits.

“The focus in FY14 was on creating a competitive Sportsbook and we are now entering an exciting phase of product development to leverage both our Exchange and Sportsbook to stand out in a crowded marketplace.”

Betfair said its objective is to achieve profitable scale in sustainable markets and during the financial year the firm has continued to focus Betfair’s marketing activities towards licensed operations. As a result the business faces substantially less regulatory risk. Sustainable markets (defined as the UK, Ireland, Denmark, Malta, Gibraltar and US) now contribute 78% of Group revenues compared to 72% for the previous year.

Sustainable revenues were up 9% over the year, with growth across all products. This contrasts markedly with revenue from other markets, which was down 18%.

Corcoran added: “The introduction of the Sportsbook, increased television advertising spend and the strengthening of our online marketing capability have broadened our customer reach and led to a 54% increase in the number of customers acquired in the UK and Ireland. As a result, we have seen three consecutive quarters of double digit revenue growth in sustainable markets.

“Our focus on efficiency has allowed operating margin expansion at the same time as increasing marketing and technology investment to approximately £200m.”

Exchange revenue was down 1% to £244.3m, while the fledgling Sportsbook saw revenue grow by 50% to £36.2m following a 50% rise in the number of active customers. Gaming

revenue decreased by 13% to £66.2m, primarily due to the continued decline in Poker and the adverse impact on other markets following the decision to focus on sustainable revenues

Corcoran concluded: “We believe the differentiation of our products and uniqueness of our model give us a real competitive advantage. Our strong trading has continued into the new financial year and we look forward to building on this positive momentum during the World Cup that kicks off tomorrow and which will be an excellent showcase for our market leading products.”