Regulated growth drives strong FY2014 for Betfair
Weak gaming performance fails to hamper overall growth " UK and Ireland customer base expands by 54%
Betfair CEO Breon Corcoran (pictured) claimed the firm’s sustainable markets strategy was “paying off” as it posted a 24% increase in full-year EBITDA to £91.1m this morning.
Strong mobile and sportbook performances and a 20% uplift in revenues from the US business helped underlying EBITDA grow by 24% to £91.1m during the period.
But a relatively small corresponding 2% rise in revenues from £387m to £393.6m was put down to a weak performance in gaming, along with a £13.3m hit caused by withdrawing from certain unregulated markets market exits last year.
Overall exchange revenues fell 1% to £244.3m, which Betfair largely put down to the lack of a major football tournament last summer, however the figure rose by 2% in regulated markets.
Sportsbook revenue grew by 50% to £36.2m following a 50% rise in the number of active customers.
Mobile revenue rose 70% during the 12 months and represented 64% of sportsbook revenues during Q4.
Gaming revenue decreased by 13% to £66.2m from £75.9m last year, primarily due to the continued decline in poker and the exits from unregulated markets such as Greece and Germany, Betfair said.
It added that in sustainable markets gaming revenue was up 2% for the full-year.
The operator’s drive to generate more revenue from regulated markets in order to reduce its risk exposure also continued at pace.
Sustainable revenues grew 9% compared to the full-year 2013 figure and accounted for 78% of the group total compared to 72% last year.
The number of customers in regulated territories increased by 27% with the UK and Ireland customer base growing by some 54%.
However, planned tax regime changes in these two countries, expected in FY15, would have cost the operator approximately £36m if implemented throughout last year.
Revenues from the US increased by a fifth to £45.7m, boosted by the launch of its New Jersey-facing casino site, and contributed EBITDA of £2m.
“Our strategy is working. The emphasis on sustainable revenues and our product and marketing investments are paying off, resulting in record revenues and profits,” said Corcoran.
The chief exec added that an increased focus on efficiency, which saw the operator generate £33m in cost savings over the year, had allowed operating margins to expand while at the same time allowing investment in marketing and technology to grow to around £200m.
“We believe the differentiation of our products and uniqueness of our model give us a real competitive advantage,” Corcoran said.
“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.”
Betfair’s share price was up 3p to 1,025p after early morning trading.