Mobile drives Betfair H1 growth
CEO David Yu to step down at end of month following Q2 core revenue growth of 12% year-on-year.
Strong growth in mobile has helped Betfair record a year-on-year core revenue increase of 12%, the company revealed in its interim results for the three months ended 31 October this morning.
The results statement is the last before David Yu departs as CEO after he announced plans to leave at the end of this month, with chief financial officer Stephen Morana taking over on an interim basis until Breon Corcoran arrives in August.
Yu, who had been with Betfair since 2001 and CEO for six years before revealing in June that he was set to step down, said: “I am proud to have been part of Betfair’s success over the past decade and am pleased to be leaving the business in good shape and with a bright future.”
He confirmed that the number of mobile bets placed in the first half of the 2011-12 financial year had doubled compared to the corresponding period in 2010-11, with mobile revenues increasing 88% year-on-year. Mobile has featured heavily for the company after it retained its Mobile Operator of the Year award at this year’s eGaming Review Operator Awards.
This has paved the way for Q2 revenue growth, offsetting the World Cup-impacted first-quarter decline, while the operator has revealed that core Betfair revenue for Q3 is up 13% to date.
The operator attributed its mobile growth to “new products” with the company in the process of designing a new Android betting exchange with development agency ITHR Consulting. It will also relaunch its mobile sportsbook in the New Year in partnership with respective mobile and sports software suppliers Mkodo and OpenBet.
Elsewhere poker was up 3% year-on-year in the second quarter, although overall games revenues dropped 5% over the same period. The operator relaunched its casino product in October and has accompanied it with a strong marketing push which is set to continue in various European territories in 2012.
The company’s share price has also risen, sitting at 826.5p a share at the time of writing, a 45% increase from August’s low of 567p.
This all comes at a time of flux for Betfair’s senior personnel, with the change in CEOs augmented by the recent announcement that former Railtrack CEO Gerald Corbett will join in January, initially as deputy chairman before replacing chairman and co-founder Ed Wray later in 2012.
Nick Batram, analyst with Peel Hunt, retained his firm’s ‘Buy’ stance, citing the fact that Betfair had “Moved to fill the CEO position with a strong appointment.”
However James Hollins, analyst with Evolution Securities, retained his firm’s ‘Neutral’ stance, urging “Caution against some considerable regulatory headwinds short-term that the group can deal with, but not without localised tax and product adjustments.”
Meanwhile, in a note entitled “iPhone, I saw, I conquered”, Numis’s Ivor Jones said that Betfair’s iPhone app update had “blown his socks off”.
“Today the company has reported that mobile bets in 1H12 were up over 100% and accounted for 7% of sports revenue. We believe this is a taste of things to come in FY13, when the three year technology project has its principal payoff. We are very encouraged,” he added.