Betfair Sees Profits Sink 27%

Internet betting exchange Betfair released its 2013 fiscal year results this week, showing that the company's profits dropped by 27% for the year.

The announcement comes a month after the firm rejected a £1 billion takeover bid from equity firm CVC Capital. Betfair CEO Breon Corcoran said that the firm would not accept the bid, and that Betfair remained committed to attracting more customers and expanding operations beyond the standard betting exchange for which the firm is known.

Financial highlights posted in the release were:

• Revenue and EBITDA ahead of previous guidance;

• Revenue of £387 million (FY12: £388.5 million): Sustainable revenue up 6%;

• Other revenue down 15% due to market exits;

• Total underlying EBITDA of £73.3 million (FY12: £86 million)

• Betfair US achieved positive underlying EBITDA for first time;

• Strong underlying free cash flow generation of £50.2 million (FY12: £43.8 million); and

• Final dividend of 9.0 pence proposed; full year dividend up 27% to 13 pence.

Commenting on the fiscal report Corcoran said, “This is a solid set of results in what has been a year of transition for Betfair. Revenues lost as a result of changing regulation have been largely replaced with regulated, more sustainable revenues."

“Following the outline of our new strategic plan at our half year results in December, the business has undergone significant change and much progress has been made in a short time. A new management team is leading the business, a wide ranging restructuring has been completed ahead of schedule, marketing investment has been focused on core markets and we have successfully launched a Sportsbook."

“While the Exchange continues to be at the heart of our business, the Sportsbook means we can now present new customers with a simpler, more familiar product and offer a wider range of promotional activity than is possible on the Exchange alone. This is helping Betfair to attract more new customers than ever before."

“Although it remains early days for many of these initiatives, we remain pleased with the operational trends we are seeing, which give us confidence that the steps we are taking will deliver a higher quality, sustainable and growing business. "

“We have made excellent progress on all of our key strategic aims and the business is in a far stronger position to generate future growth than it was at the start of the year."

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