Betfair First-Half Profits Decline By 12.7% To £6.8mDecember 14, 2010 8:44 am
Betfair, the UK online betting exchange giant, has failed to impress the market after posting a drop in its first-half profit after tax of 12.7% to £6.8m, down £1 million from the same period last year.
However, Betfair was quick to point out that its initial public offering (IPO) on the LSE in October had adversely affected the figure due to a one-off associated costs of £14.7 million.
On 22nd October, Betfair sold 16.2 million shares in the company at £13 a piece and although rising 19% on the day, have now fallen back 17% below their original IPO to £10.80.
Despite dampening their H1 report, CEO David Yu said the IPO was “an important development which we believe will enable us to grow more quickly than we could as an unlisted business.”
Betfair’s revenue figures were a lot more impressive, though, with its half-year figure to end of October up 12.3% to £188.5m compared to the same period last year.
The company’s active customers for its core offerings, including its betting exchange, games and poker products was also up 31.1% to 654,000, while its cash position at the end of the H1 period was a debt free £178.2m.
Summing up the latest first half results, CEO David Yu commented:
“We are pleased to report our first set of results as a listed company, which cover an exceptionally busy period…From a trading perspective, we delivered double digit revenue growth in the period driven by a strong performance during the World Cup in the first quarter.”
“Growth in the second quarter was moderated by more challenging conditions, particularly in horse racing and poker, which together offset robust performances in football, other sports and Games.”
David Yu then went on to highlight the fact that Betfair’s third quarter had started well mainly due to sports, in particular football, but that the UK’s weather had adversely affected horse racing and thus their overall growth rates.
Yu also acknowledged the challenges ahead for Betfair’s weakening poker offering after moving to the Ongame network, but struck an optimistic note by stating he believed the company was on track to deliver an adjusted EBITDA for the current financial year in line with expectations.
“Looking further ahead, we believe that Betfair’s unique product proposition and well-invested technology platform position the Group strongly for growth in the years to come, together with the potential for significant margin enhancement in Core Betfair,” commented CEO David Yu.