Betsson casino growth covers sportsbook shortfall
Operator reports 11% full year revenue rise despite sports vertical suffering 15% fall during Q4
Betsson this morning reported an 11% increase in full-year revenues after strong casino growth helped the firm offset a stuttering sportsbook performance.
Group revenue increased to SEK4.2bn (£370m) for the year ending 31 December 2016, with casino contributing SEK2.9bn (£261.7m) of that total following 14% growth while sportsbook remained broadly flat at SEK1.1bn (£91.2m).
Operating income amounted to SEK946m (£85.2m) for the full-year, a rise of 7% on the previous year, but operating margin dipped marginally from 23.8% to 23%.
During Q4, casino revenues rose 20% YoY to SEK823.7m (£74.2m), while mobile revenues were up 46% to SEK546.8m (£49.2m), largely driven by launch of the firm’s new front-end technology platform.
However, sportsbook revenues dropped 15% during the final quarter of last year to SEK264.4m (£23.8m), which Betsson partly attributed to the withdrawal from a number of markets and a decrease in revenue from B2B partner Realm Entertainment.
Realm Entertainment, which Betsson noted derived a portion of revenues from players in Turkey, saw licence revenues fall from SEK170m (£15.3m) to SEK139.4m (£12.6m) in Q4.
Betsson also said it had suffered from adverse sporting results with sports margin down from 7.1% to 6.6% in Q4.
Ulrik Bengtsson, president and CEO of Betsson, said recent investment in its sportsbook offering, including the acquisition of RaceBets, was expected to have a positive effect in 2017.
“Betsson has made significant investments in product development throughout 2016, which has pushed the casino growth.
“The acquisition of the horse betting operator RaceBets adds an important product to Betsson’s sportsbook offering and adds revenue from mainly locally regulated markets.
“Increased investments in product development, higher share of revenue from regulated markets and less revenue from countries with high margin have had a negative impact on earnings during the year.
“The operating margin for the full year was 23% despite a very weak second quarter. This shows that Betsson has a good balance in its business and can absorb both temporary revenue decline and increased costs, over time.”
Bengtsson added the company has made a “strong” start during the first quarter of 2017.
At the time of writing, Betsson’s share price was up 4.5% to SEK 81.90.