Sportingbet sees 27% growth thanks to World Cup
Sportingbet saw revenue growth of 27% but net profit fell 67%, it announced in its full-year results today.
Sportingbet saw net revenue rise nearly 27% to £207.5m this year, driven by a strong World Cup performance and the continued growth of its in-play offering.
Full-year net profit however fell 67% to £7.1m from £21.9m, impacted by one-off costs related to the group’s US$33m settlement agreed last month with the US Department of Justice for activities prior to the passage of the Unlawful Internet Gambling Enforcement Act in late 2006.
Over £50m was staked on the operator’s sportsbook during the World Cup, revealed the group this morning, with 65% of this bet in-play at a margin of 11.7%, with the operator describing the latter figure as “particularly pleasing”. In-play also grew to account for 61% of European sports revenue, compared to 56% last year.
Sportingbet financial director Jim Wilkinson told eGaming Review: “We’re very pleased with the results, which were driven mainly by the sports book. That’s about 65% of the revenue and it’s been growing the strongest. Most of our investment has gone into it, as it’s the part we’re the best at.”
He continued: “We are going to have a job to replace the World Cup revenue, however I think we are still looking to get 8% revenue growth next year through improved product, improved marketing and continuing to exploit the dynamics in each of the markets.”
Investment spend is not expected to increase significantly next year, but the sports betting operator invested £24m in the IT side of the business last year, and intends to invest the same next year.
The European business grew strongly last year, with gross revenue up 30% from £93.6m to £121.4m. eGaming Review reported earlier this month that Sportingbet had shut down its French office, but had not ruled out re-entry into the French market at a later date if it were economically viable.
The operator is looking at opportunities for expansion in South America, “having just opened up in Chile”, said Wilkinson. “Apart from that it’s building on what we’ve already got, so particularly Eastern Europe, Southern Europe and Australia,” he continued.
Nick Batram, analyst from KBC Peel Hunt, this morning put a ‘buy’ recommendation on Sportingbet. In terms of the US settlement he said: “Having settled with the Department of Justice (DOJ) Sportingbet is now free to participate in the industry consolidation that is unfolding. Whether consolidator or consolidatee, Sportingbet needs to be part of the process.”
Other operational highlights for Sportingbet during the period included a product for mobile, launched about six months ago in the UK, with plans to launch an iPad App within the next two weeks. The company also renewed its shirt sponsorship of English Premier League football team Wolverhampton Wanders and entered into a betting partnership with Tottenham Hotspur.
The last financial year also saw the sports betting specialist move its shares to the main London Stock Exchange from the Alternative Index Market (AIM) in May this year, reflecting growth in the company.