Betfair Q1 revenue falls 13%
Betfair sees revenue fall but EBITDA rise following failed CVC takeover bid
Betfair Group has declared it is on course to meet full-year expectations despite posting a 13% year-on-year decline in revenue for Q1 FY14.
Revenue for the three-months ending 31 July 2013 fell to £90.4m, down from £103.8m during the corresponding 2012 period.
The company attributed the dip in its top line to a lack of a major summer football tournament and regulatory issues affecting business in Greece, Germany, Cyprus and Spain.
The exchange and sportsbook operator did, however, see a 16% hike in EBITDA to £24.9m on the back of cost savings and a 6.8% rise in margin to 27.5%. Meanwhile, mobile saw a 53% increase in revenues.
Breon Corcoran (pictured), Betfair’s chief executive officer, commented: “Betfair’s first quarter performance is in line with our plan and leaves us on track to meet our expectations for the full year.
“The business is continuing to show that it can compete more aggressively and efficiently in our key markets. We now operate from a far more sustainable revenue base and saw a 10% increase in active customers in sustainable markets in the period.”
Betfair considers the UK, Ireland, Denmark, Gibraltar and the US as its sustainable markets and it is here where the company saw active customers increase to 396,000 driven, it said, by its new fixed-odds sportsbook.
Sportsbook saw the volume of bets placed on risk sports products double in the period, resulting in an 18% growth in overall revenue.
The company said early indications for Q2 were good as revenues in sustainable markets accelerated to double-digit growth during August helped by a TV advertising campaign which the company said reflected a renewed focus on regulated markets.
Panmure Gordon analyst, SImon French, said: “We think this is a reassuring update and at this early stage in the year we expect no change to consensus forecasts of £87m EBITDA.”
Following the announcement of the results, Betfair’s share priced had fallen 5p to 987p at the time of writing.
The news comes after CVC Capital Partner’s failed bid to buy the company earlier this year. In May, Betfair turned down CVC’s 950p a share offer due to the bidder’s ‘undelievrable business plan’.
In August, Betfair agreed an online gaming partnership with the Trump Plaza casino in New Jersey in a deal which will see the London-listed operator provide an egaming platform to the casino operator.