Betfair Q3 revenues up 11%
Mobile revenues double " good performance in majority of verticals helps operator to strong Q3 results.
Betfair has posted an 11% increase in third quarter revenues with mobile income a stand out, up 100% to 7% of total returns.
Revenues for the three months ending 31 January grew to £85.3m, up from £77m for the same period last year, aided by non-risk sports income from the company’s core exchange betting product, which rose 13% year-on-year to £59.7m. Fixed-odds betting also grew, up from £3.9m to £5.4m, with the company almost halving Bet365’s lead in the January Oddschecker rankings.
Poker performed strongly, with revenues up 13% to £5.9m, offsetting the loss of Italian revenues due to its withdrawal from the market last year. Games revenues fell 5%, down from £14.3m to £13.6m for the same period last year, despite the relaunch of Betfair’s casino product in October last year.
Aided by the launch of the company’s native iPad app, the first product launched by the San Francisco development centre, mobile revenues increased 100% to £5.8m, with 11m bets placed “ up 127% year-on-year. This follows an 88% growth in mobile revenues in the company’s Q2 figures, in which the company revealed it was developing an exchange betting app with development studio ITHR Consulting.
Following the introduction of an exchange betting decree in Italy, Betfair has revealed that it will look to re-introduce its casino and games product to the market should it be granted a licence to operate its exchange product. It has also confirmed that it has applied for licences in Schleswig-Holstein and Spain.
The company has also pulled out of South Africa in response to a Supreme Court of Appeal Ruling, but plans to apply for a fixed-odds licence in the Western Cape Province.
The company also launched a new seven-figure European marketing campaign, which interim CEO Stephen Morana (pictured) described as an attempt to strengthen the company’s standing among the leading operators:
“To help reinforce our market position, we have placed more focus and energy into building brand recognition across our geographies. Our new ‘Don’t Settle for Less’ marketing campaign delivers the simple and effective message that better odds are available on Betfair. The campaign is running across Europe and focuses on horse racing, football, tennis and golf, making direct comparisons between our pricing and that of our major competitors,” Morana explained.
Morana, who is in charge until Breon Corcoran takes over in August, revealed that the company expects to meet its full-year targets of £350m core revenue and £92m core EBITDA following “another good quarterly performance,” saying: “Trading has remained encouraging in Q4, with exchange revenue continuing to exhibit double-digit growth rates and overall core Betfair revenue up 10% in the quarter to date. This leaves us confident that we will meet our expectations for the full year.”
Analyst Nick Batram of Peel Hunt retained his company’s ‘Buy’ recommendation, commenting that international expansion and investment in technology should offset the impact of UK regulation: “This is the third consecutive quarter of delivery for the group which, after its false start as a quoted company, is to be welcomed. Rebuilding trust is helping to rebuild the rating.
“There are some challenges on the horizon and the introduction of a remote gaming tax in the UK would see Betfair potentially hit harder than most. However, international opportunities are opening up (Denmark, Italy, etc.) and the full benefits of the increased technology spend have yet to be felt,” he added.
Panmure Gordon’s Simon French also retained a ‘Buy’ recommendation: “We think momentum is firmly with the group, with regulatory reform moving in its favour and ongoing technological advances, not least with yesterday’s launch of the “Betfair Everywhere” price checking tool.”
Former Britvic chairman Gerald Corbett officially joined the company today, replacing Ed Wray as chairman, with Morana thanking the business’ co-founder for his years of service: “On behalf of everyone at Betfair, I would like to thank Ed for his pivotal role in Betfair’s success. As co-founder, Ed was integral in taking Betfair from an initial concept through to the global operator it is today and in making the business one of the UK’s most successful internet companies. I have personally greatly valued and enjoyed working together over the past 10 years.”