Sportsbook and regulated markets drive Betfair forward
Sports revenue up 27%, aided by mobile boost, as exchange revenue remains largely flat in Q3 FY14
Betfair has shrugged off a relatively flat period for its exchange product to post a 28% increase in underlying EBITDA to £20.2m for the three months ended 31 January 2014 driven by sportsbook and mobile growth.
The growth was in part due to a 27% year-on-year increase in sportsbook revenues to £9.5m following the launch of the operator’s new fixed-odds product in February 2013, with 60% of sportsbook wagering now derived from mobile devices.
Exchange revenue however remained largely flat, growing 1% year-on-year to £56.7m in the face of competition from both Ladbrokes “ which launched an equivalent product in November 2013 “ and Matchbook.
Gaming recorded 3% growth for the quarter, rising to £18.5m after gaming revenue on mobile devices trebled and Breon Corcoran, CEO at Betfair, said the operator had performed well against all key metrics.
“We are now competing more aggressively and are investing heavily in customer marketing and product development,” Corcoran said.
Revenue from sustainable markets amounted to 77% of total revenue following the withdrawals from markets including Greece and Germany, moves which the operator revealed had cost them £1.8m.
Betfair first announced it was to withdraw from the Greek market in November 2012 citing regulatory uncertainty, whereas stuttering progress in Germany forced the operator to re-evaluate its options in the same month.
Revenue from Betfair’s US operations grew 24% to £10.4m, driven by the addition of horserace betting in New Jersey and the launch of its online casino in November last year.
Barclays analyst Patrick Coffey said the results would reassure the market on the sustainable markets strategy put into place by Corcoran last year.
“While it is still early days, and the competitive environment in the UK will remain intense in 2014, we are impressed by the speed of Betfair’s turnaround,” Coffey said.