Australia at heart of Sportingbet growth
Amounts wagered in Commonwealth country rises 95% after first two months of Centrebet figures factored into results.
Strong growth in Australia has helped Sportingbet record an overall year-on-year increase in amounts wagered of 35%, the operator revealed in its results for the three months ended 31 October.
The first-quarter figures, which take into account two months worth of Centrebet since the purchase of the Northern Territory licensed bookmaker in August, were highlighted by a 95% year-on-year increase in Australian amounts wagered.
Total revenue for the group rose 17% to £59.9m for the period, while NGR in Australia rose 58% on a like-for-like basis, and taking into account Centrebet’s £9.1m contribution during the quarter the year-on-year NGR growth for the region across the three-month period stands at 165%.
Consequently Australia has overtaken Europe in its contribution to total amounts wagered with Sportingbet: of the £693.7m in total amounts wagered, £398.8m stemmed from Australian sports betting (up from £204.2m in Q1 2010) with £281.5m coming from sports betting in Europe.
Amounts wagered on sports betting in Europe were down 4.7% from the £295.4m total recorded in the corresponding period in 2010, thanks largely to an 11% decline in Greece.
After predictions from analysts that the London-listed bookmaker could be deriving as much as 70% of its revenues from regulated markets early in the new year, the Q1 results saw 40% of revenues from regulated territories and a further 18% from territories where the company is already paying tax ahead of regulation coming into force.
The period also saw Sportingbet dispose of its Turkish business Superbahis to the GVC-backed East Pioneer Corporation, and James Hollins, analyst with Evolution securities, suggests that the company’s strategy of “[C]leaning up its revenue base…will drive short-term negative tax implications (as reflected in the current share price) but deliver higher quality earnings from an already high quality product, trading team and senior management.”
Chief executive Andy McIver (pictured) noted that: “With the acquisition of Centrebet in Australia and the disposal of our Turkish Language website, we are making good progress towards our goal of deriving the majority of our revenues from regulated territories.”
However the Turkish exit did not come soon enough to prolong discussions with Ladbrokes, with merger talks terminated in October following reported “legacy risk” concerns on the part of the latter.
Hollins retained his firm’s ‘Buy’ recommendation, noting that “The move to regulation has clear short-term tax impacts, but will improve earnings quality and we project Sportingbet will maintain premium levels of market share in the core European territories, compounding its top two position in the regulated Australian market.”
Away from the core vertical of sports, casino and gaming contributed £10.9m in both amounts wagered and NGR during the period, with a further £2.5m coming from poker, the latter a 28.6% decrease on the same period in 2010 but minuscule compared to the growth in Australia.
The second quarter of Sportingbet’s financial year will see the company increase its regulated presence with the outcome of licence applications in Spain, Denmark and Italy expected to be heard.
Over the last three months its preparations for entry into regulated markets included the acquisition of Danish-facing sportsbooks Danbook and Scandic.
The company has revealed that any surplus cash generated will go towards the final payments in its settlement with the United States Department of Justice, as well as exceptional costs related to the Centrebet and Superbahis deals.