Betfair stock has risen 37% in 2014 (FTSE – £14.85), whilst competitors Ladbrokes (FTSE – £1.19) and William Hill (FTSE – £3.48) saw respective share price declines of 35% and 11%.
The Daily Telegraph financial journalist commented that changes to UK gambling regulations in 2014, have made Betfair Plc an attractive proposition to investors, as the operator has maintained low operational costs and improved cross-sell of products throughout its verticals.
Ficenec notes that the ‘shake-up’ of the UK gambling market has affected the share price of traditional/legacy bookmakers who operate retail and online betting divisions. Potential investors have been put-off by higher operational costs of high street enterprises and the UK government targeting fixed odds betting terminals.
Betfair share price gains in 2014, continue the operator’s resurgent performance Under CEO Breon Corcoran. Appointed in August of 2012, Breon Corcoran replaced former CEO David Yu at a period when the firms share price was trading at its lowest – £7.96 since its 2011 IPO.
Betfairs CEO has turned around corporate performance, by improving efficiency and refocusing Betfair on key markets.
With regards to future share price performance, Ficenec warns that Betfair share price which currently trade at 24.5 times earnings may be overvalued, given that bookmakers will not enjoy a FIFA World Cup and will have to deal with POC taxes impacting on their bottom lines.
Betfair/William Hill/Ladbrokes 2014 share price performance –