Bet365 posts AU$40m loss in Australia

Bet365’s Australian business posted a AU$40.8m (£22.5m) loss in its 2013 financial year as rising costs cancelled out a near threefold increase in revenues.

The company said its Australian customer base had grown by 83% during the 12-month period ended 31 March to 73,000 and that revenues had increased 278% to $29.1m (£16m).

Total amounts wagered exceeded $1.4bn over the course of the year representing an increase of $842m in 2013.

But costs relating to its 210 employees, including a 15% rise in headcount, spiked 63% to $19.9m and advertising spend rose from $15.8m in 2013 to $17.3m.

There were also sharp rises in costs relating to IT spend, affiliate commissions and levies which increased from around $4m to almost $12m.

Launching the bet365 brand has been tough in the notoriously competitive Australian market, which has cost the firm $77m (£42.6m) in the space of 24 months, after losses of $36.2m last year.

Its Stoke-based parent company, which posted record profits of £320m for the 2013 financial year, has issued a loan to cover the Australian losses to be paid back when cash flow improves.

The rise in revenues and player numbers suggest the brand and product is gaining momentum, and the company said it believes its Australian arm will deliver a positive financial contribution to the group in the long term.

Paddy Power’s Australia-facing Sportsbet business posted a 15% revenue rise to €179.6m (£142.5m) last year and profits of €33.5m (£26.5m), while William Hill’s Australian arm posted H1 revenues of £59m and profits of £10.5m last month.