Betsson's revenues up 19% as Europe-Bet plans revealed

Betsson this morning reported a 19% year-on-year rise in H1 revenues to SEK1708m (£127.4m) in what was outgoing CEO Magnus Silfverberg’s final set of results before leaving the operator.

Revenues in Q2 were up 14% to SEK861m (£64.2m) and marked the eighth consecutive rise in revenues overseen by Silfverberg, while EBIT grew 12% to SEK213.8m (£15.9m) despite a negative FX hit and costs related to the £54m acquisition of Georgia-based operator Europe-Bet.

Silfverberg said the Europe-Bet acquisition should be completed by the end of the month and would help the firm move towards a much larger share of regulated revenues, with Europe-Bet bringing in $54.2m (£34.6m) in revenues in 2014 and reporting a $20m (£12.8m) profit from its 75,000 active players.

Were Europe-Bet’s revenues included pro-forma into the Q2 results, Betsson would now be drawing 16% of revenues from locally licensed markets.

“We believe it strengthens our position in the market overall,” Silfverberg said. “We get another strong revenue source to add to our core markets and diversify our geographical footprint.

“We are moving towards a much larger share of regulated revenues with the acquisition,” he added.

Betsson plans to maintain the Europe-Bet brand, which enjoys a 30% market share in Georgia, but migrate it to its Techsson platform. “We think there is a great revenue upside by migrating Europe-Bet to our platform,” Silfverberg said.

Silfverberg aso said the firm had the financial capacity to fund future acquisitions up to an approximate value of SEK3bn (£220m) but said the biggest challenge was finding appropriate targets.

The firm described its UK business, which includes the Betsafe and Mr Smith brands, as producing “strong growth” adding that the market “continues to make sense for us”.

Elsewhere mobile revenues increased 121% year-on-year and now account for 33% of total revenues, while more than half of all sportsbook bets are now placed on mobile.

And marketing costs increased by 16% to SEK166m (£12.4m) but continued to grow in line with revenues as the firm’s marketing spend remains at around 20% of income.

Silfverberg also commented on the recent regulatory breakthrough in Brazil, noting that Betsson already had a Portuguese-language brand and describing Brazil as “a natural step for Betsson”.

Betsson is currently searching for a new CEO after Silfverberg announced he would depart after the Q2 results for a new role as CEO of business decision support organisation Bisnode.

“It has not been an easy decision to leave Betsson but it will thrive even without me,” he said.

Betsson’s share price was up SEK4.3 to SEK146.6 after early morning trading.