Betfair Unveils Half Year Results

Internet betting exchange Betfair has released its financial results for half year ending October 31st, noting increased revenues and a change in strategy to focus more on the company's group numbers instead of core numbers.

Key financial indicators for the six month period ending October 31st, 2012 were:

• Changed approach to reporting: focus is on Group numbers rather than Core

• Share based payments are included in underlying financials

• A more conservative approach to the capitalization of future development costs

• Group revenue from continuing operations up 5% to £200.6 million, driven by a strong sports and mobile performance

• Group underlying EBITDA from continuing operations down 2% to £42.3 million, as marketing investment offsets revenue growth

• Group underlying earnings per share down 25% to 17.4 pence due to a higher depreciation and amortization charge following increased capital expenditure

• Interim dividend up 25% to 4.0 pence per share Non-cash impairment of goodwill and other intangible assets of £80.6 million

• Current underlying trading is in-line with expectations: revenue up 7% in Q3 to date after adjusting for regulatory impacts in Spain, Germany and Cyprus

The company's strategic announcements for the future of the company include:

• Focusing on regulated jurisdictions to increase sustainability of revenues

• Investing in product and brand to enhance competitive position and drive growth

• Introducing greater accountability and become a leaner and more dynamic business; c.£20 million of savings identified to date

• Exiting from investments in LMAX and Kabam

Commenting on the results, Betfair CEO Breon Corcoran said:

“This is a solid set of results for the first six months of the year. We are now pursuing a new and more focused strategy to address the business’ challenges and exploit its market opportunities."

“The review we have carried out over the past four months has demonstrated a number of strengths. Betfair has a unique product offering, strong brand affinity and scale in the UK. However, we have also identified a number of areas requiring change and fixing these will take time."

“Recent regulatory developments have been challenging and we are reducing our exposure to markets with an uncertain regulatory future. We will focus investment within regulated markets with sustainable revenues."

“Creating a simpler product that retains the key advantages of the exchange, combined with investment to return the brand to its previously strong position, will allow us to increase our audience and accelerate revenue growth."

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