Sportsbook powers H1 Betfair growth

Betfair reported above expectation H1 results this morning as revenues increased 15% and the operator’s fixed-odds sportsbook continued to take market share.

Total revenues for the six months to 31 October were £274.4m, while EBITDA increased 9% to £80.5m, in spite of a PoC tax bill of £26.8m.

“These results, which came against a tough comparative period featuring last year’s football World Cup, are ahead of our original expectations and demonstrate the Group’s continued strong momentum,” Breon Corcoran, Betfair CEO, said.

The firm’s gaming revenues increased 18% to £49.7m, sports betting revenues grew 11% to £184.8m but it was the US operation which experienced the best period, up 38% to £39.3m.

Corcoran stressed Betfair’s “relatively low exposure” to unregulated jurisdictions, with revenues up 25% in sustainable markets. Sustainable revenue mix is now 88%, up from 82% last year, owing in part to the firm’s temporary withdrawal from Portugal as it awaits a licence.

“Our strategy of focusing investment in markets with good regulatory visibility continues to pay off,” Corcoran said.

The firm said mobile was the “key growth driver across all products” and represented 76% of sportsbook revenues while a marketing campaign launched at the start of the football season helped boost new account activations by 47% in its core UK and Ireland markets.

In an analyst note this morning, Numis’ Ivor Jones retained a “buy” recommendation, noting that EBITDA would have grown 45% had it not been for PoC.

Meanwhile Barclays’ Patrick Coffey said Betfair remained its “preferred stock for growth” in the sector, adding that the results were “well ahead of our expectations”.

Betfair also confirmed all relevant regulatory filings for the proposed merger with Paddy Power have been filed, with completion on track for Q1 2016. Shareholder documents surrounding the recommended merger are due to be published on Friday.

Betfair’s share price was up 3% to 3,598p after early morning trading.