MIXED RESULTS IN Q3-2013 FROM BETFAIR
07th March, 2013 at 02:24:52
Exchange operation down, but sports operations and mobile revenues well up
The UK online gambling group Betfair
plc posted its Q3-2013 results to end January Thursday, reporting that:
* Exchange NGR declined 6% to £ 56.3 million (Q3-2012: £ 59.7 million)
* Sports betting operations performed well - up 39% to £ 7.5 million (Q3-2012: £ 5.4 million)
* Gaming declined 8% to £ 18 million (Q3-2012: £ 19.6 million)
* Mobile revenues doubled in the quarter, accounting for over 50% of player activations in February.
* Core Betfair NGR was down 3% to £ 81.8 million (Q3-2012: £ 84.7 million)
Chief executive officer Breon Corcoran opined that the company had performed well and was on track to meet full year expectations.
"UK revenue was up 6% driven by the continued strength of mobile betting as well as favourable sporting outcomes. In line with our previous guidance, international revenues declined as a result of regulatory change and our focus on sustainable jurisdictions.
"Mobile revenues doubled in the quarter and the channel accounted for over 50% of activations last month, he said.
"We are focused on delivering the plan we set out in December. The new leadership team is in place and has started to implement the changes required to make Betfair a more focused and leaner organisation.
Corcoran said he was confident that the results for the current financial year will be in line with previous guidance, with group revenues of between £ 370 million and £ 385 million and group underlying EBITDA of between £ 65 million and £ 70 million.
"Revenue from the Exchange was affected by the continuing impact of previous regulatory developments in Greece, Germany, Cyprus and Spain, and was down 6% to £ 56.3 million, he said.
"In the UK, football revenue growth was strong, helped by more fixtures falling in the period. This was offset by the large number of racing cancellations (69 compared with 8 in the prior year) following the poor weather conditions."
Corcoran singled out mobile betting for special mention, noting:
"Over 50% of our customers in the UK and Ireland placed a mobile bet in the period and the channel accounted for approximately 20% of exchange commissions. Our mobile products have been enhanced through the introduction of integrated content and a notification service that keeps customers updated when goals are scored in their selected matches.
The quality of Betfair Mobile
apps continues to be recognised by industry observers, he claimed..
Sports revenue increased by 39% to £ 7.5 million, primarily as a result of very strong margins following favourable football results, Corcoran revealed.
"The launch of our Sportsbook will provide a simpler product experience, which should enable us to address a greater proportion of the recreational segment of the online market while offering our existing Exchange customers more betting opportunities," he said. "A limited number of customers are currently trialling the new Sportsbook website before it is rolled out on a wider basis.
"During the period, we also launched our new sportsbook-specific iPhone app to complement the existing exchange app. Take up has been encouraging and mobile accounted for over 40% of sportsbook revenue in January.
In the company's Gaming operations, Corcoran said that the UK business performed well with strong casino growth off-setting weak poker revenues. Overall games revenue, however, was affected by the impact of international regulation and was down 8% to £18 million.
"In January, we launched the iPoker network on our âEURËœ.com' site, which includes our UK business," he said. "We will initially offer both the iPoker and Ongame networks before migrating all customers to iPoker from July."
Despite slightly higher average customer balances in the period, revenue from the management of customer funds was down 54% to £ 300,000 due to lower interest rates.
The US Betfair subsidiaries were performing to expectation, with handle up 7% and wagering revenue up 8 percent, although revenue was flat due to lower TV revenues and an adverse impact from foreign exchange.
In Betfair Australia, the company reported revenue up 13 percent, driven by the increase in commission rates for domestic racing in April 2012 which partially covers higher race field fees.
Finally, Corcoran reported on the disposal of much of Betfair's interest in LMAX, saying: "The disposal of 67% of our shareholding in LMAX was completed in January following approval from the Financial Services Authority.
Following this transaction, our stake has reduced to 33% and we will not have significant influence over management of the company. Accordingly, the holding will be accounted for as an investment classified as available for sale and will not be consolidated."
Related News Tags: Uk, Germany, Cyprus, Betfair, Betfair Mobile