Betfair profits and revenues enjoy Q3 double-digit growth

Strong growth across both sports and gaming products saw Betfair post double-digit EBITDA and net revenue growth in Q3 FY15, with the key financial metrics up 17% and 20% respectively.

EBITDA for the three months ended 31 January was £23.6m, up from £20.2m in Q3 FY14, although the firm said profits would have increased 51% had it not been for the impact of the UK Point of Consumption tax, which cost the company approximately £7m.

Meanwhile net revenues for the three-month period totalled £114.6m, up from £95.4m last year and represented the fourth consecutive quarter of double-digit revenue growth.

Sports net revenues, which combines its Exchange and Sportsbook products, were up 16% from £66.2m to £76.7m, driven by a 96% increase in mobile revenues with the operator reporting 80% of its Sportsbook customers to be active on mobile.

Gaming also enjoyed a strong quarter as revenues grew 30% from £18.5m to £24.1m, which the company said was due to a more effective cross-sell from sports into gaming, as well as an increased take-up of mobile with more than half of gaming customers accessing the games on handheld devices.

Revenues from Betfair’s sustainable markets – UK, Ireland, USA, Italy, Denmark, Malta, Spain, and Bulgaria – were up 27% from £73.2m to £92.9m and represented 81% of total revenues compared to 77% during the same period last year.

The firm said this was down to a 50% increase in active customers from 424,000 to 638,000 while revenues from other markets declined 2% from £22.2m to £21.7m as part of a strategy to focus on regulated jurisdictions.

Betfair’s nascent US arm also enjoyed 30% growth with revenues up from £10.4m to £13.5m, driven by a 17% increase in revenues from its TVG television business and growth from within its New Jersey-facing online casino.

Revenues from TVG are expected to increase further in Q4 and beyond following Betfair’s recent acquisition of rival horseracing television network HRTV for US$47.8m (£31m) and a long-term rights agreement with the Stronach Group, which operates five race tracks.

“This was another strong quarter,” Breon Corcoran, Betfair CEO, said. “Betfair has momentum and is continuing to gain share in its key markets by acquiring and retaining customers through product differentiation, attractive odds and generous promotions.

“We are now two years into a programme of substantial product and marketing investment and this is delivering sustained growth.

“Our in-house development capability is allowing us to develop new products quickly and efficiently. This is particularly evident in mobile, where our proprietary technology gives us an edge in the largest and fastest growing channel,” he added.

Betfair’s share price was up 8% to 1,940p after early morning trading.