Betfair's First Quarter Driven By Sports Betting

UK based betting exchange Betfair has released its first quarter 2013 financial results, highlighting a strong performance in the company's sports betting business.

Key financial indicators for the period were:

• Core Betfair revenue up 13% to £91.6 million (Q1 FY12: £80.8 million)

• Sports revenue up 21% to £72.3 million, with a particularly good UK performance, where revenues rose 23%.

• Quarterly average revenue per user was stable at £188 (Q1 FY12: £186)

• Active customers increased across the group by 13% to 485,000 (Q1 FY12: 430,000).

• Mobile betting growth continued with betting volume up 114% to £15.8 million, and revenues up 98% to £8.2 million..

• Non-risk sports business generated revenues of £68.9 million - up 16%

• Risk sports activity brought in £3.4 million in revenues - up a staggering 952%

• Sports revenues of £72.3 million represented an increase of 21%

• Games revenues were down 7% at £13.7 million

• Poker revenues slipped another 4% to £91.6 million

It was also announced that acting CEO Stephen Morana would step down following the arrival of the company's new CEO Breon Corcoran.

Morana did speak about the financial results, saying:

“The UK, our largest market, was our strongest performing region, driven by the continued success of the “Don’t Settle for Less” advertising campaign and a great summer of sport."

“Mobile betting goes from strength to strength, reflecting increasing smartphone penetration, product enhancements and customer familiarity. Mobile usage and revenues doubled and half of all customers in the UK and Ireland placed a mobile bet in the first quarter. We have also continued to deliver important new product upgrades in recent months, including new Android and iPad apps that include our popular Cash Out functionality."

“Change in the regulatory environment in which we operate has brought challenges in the form of product restrictions and higher levels of taxation. This has recently been illustrated in Spain and Cyprus, which have sought to restrict the products that operators can offer, and in Germany, where a turnover tax has been implemented that purports to cover all sports betting."

“Like-for-like net gaming revenue, adjusting for the impact of regulation, was marginally higher in Q2 to date compared to the same period last year. A slower start to the football season and reduced interest in other sports during the Olympics resulted in slower revenue growth in August."

“Finally, I have informed the Board that I intend to step down once a successor in the CFO role has been identified. It’s been a very difficult decision to make but I feel the time is now right, for both me and the company, to move on. I have been incredibly fortunate to have been part of the Betfair success story over the past 10 years and am immensely proud of our achievements. Betfair is entering into a new era under the leadership of Breon Corcoran and I believe the company has a very bright future ahead of it.”

Betfair Chairman Gerald Corbett also commented, saying: “We understand why, after ten years, Stephen would like to start thinking about the next stage of his career and hand the reins over to a new CFO. On behalf of the whole company I would like to convey our immense gratitude to Stephen for the work he has put in to make the business the success it is today, and in particular, the excellent job he did as Interim CEO. Stephen will continue in his current position until we find his successor and we will begin the search process immediately.”

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