Thursday September 5,2013 : REVENUES DOWN IN BETFAIR'S FISCAL Q1-2014
Focus on regulated markets is taking its toll
The British online gambling group Betfair plc posted its fiscal Q1-2014 results Thursday, admitting to losses in revenue caused by Management's decision to focus on sustainable regulated national markets.
On the plus side, overall EBITDA was up year-on-year 16 percent at GBP 24.9 million due to cost savings.
The report covers the three month period ended July 31 2013 and shows:
* Total revenue down 13 percen t at GBP 90.4 million.
* Revenue from sustainable markets down 7 percent at GBP 69.9 million.
* Revenue from other markets down 28 percent at GBP 20.5 million.
* Revenues from exchange betting down 13 percent at GBP 60 million
* Revenues from gaming operations down 31 percent at GBP 13.7 million, with online poker underperforming again.
* Revenues from sports up 18 percent at GBP 4 million.
* Sports revenue from sustainable markets was up 52 percent, however.
* Revenues from US operations up 11 percent at GBP 12.5 million, boosted by a five year exclusive deal which commenced in March 2013 to provide Advanced Deposit Wagering in New Jersey.
* EBITDA up 16 percent at GBP 24.9 million, driven mainly by cost cutting.
* Underlying EBITDA margin improved by 6.8 percent to 27.5 percent.
* Total active players down 4 percent at 530 million, with 396 million from sustainable markets – up 10 percent.
* Mobile operations continued to perform strongly, with revenue up 53 percent.
Breon Corcoran, Betfair’s chief executive officer reported that the company's first quarter performance is in line with his plan and puts the firm on track to meet expectations for the full year.
"The business is continuing to show that it can compete more aggressively and efficiently in our key markets. We now operate from a far more sustainable revenue base and saw a 10 percent increase in active customers in sustainable markets in the period," he said.
Corcoran singled out for mention the introduction of Betfair's Cash Out facility on its sportsbook offering, and the company's biggest ever television advertising campaign which as at August 2013 had helped increase the number of active customers by 26 percent.
Markets from which Betfair has departed include Greece, Germany, Cyprus and Spain, with an impact on revenues of GBP 6.5 million.
"In addition, our increased focus on sustainable markets and subsequent cessation of direct acquisition marketing investment in jurisdictions with insufficient regulatory visibility has continued to have an adverse impact on revenue growth," Corcoran noted.
"The revenue impact in these countries, however, continues to be smaller than previously expected, particularly in the Exchange business."
Markets which Betfair regards as "sustainable" include the UK, Ireland, Denmark, Malta, Gibraltar and the USA, where overall revenues were down 7 percent and revenue from other markets was down 28 percent.