11th Jun 2014 07:00
LONDON (Alliance News) - Online betting company Betfair Group PLC Wednesday reported higher profits and revenues in its last financial year, prompting the company to raise its dividend by 54%.
For the year ended April 30, the company reported a pretax profit of GBP61.1 million, compared with a GBP49.4 million pretax loss the prior year, when it booked GBP104.5 million in exceptional expenses and charges.
On a underlying basis, which strips out exceptional costs, earnings before interest, taxes, amortisation and depreciation were GBP91.1 million, up 24% from GBP73.3 million the prior year. Betfair said the underlying EBITDA growth was driven primarily by cost savings.
Revenues for the year rose 2% to GBP393.6 million from GBP389.0 million the prior year, which Betfair said was driven by strong growth in Sportsbook and Betfair US, although it said some of this growth was offset by a weak gaming performance after exiting certain markets during the year and the absence of a major international football tournament.
"Our strong trading has continued into the new financial year and we look forward to building on this positive momentum during the World Cup," Chief Executive Breon Corcoran said in a statement.
The company has just gone through a restructuring after hitting a tough patch, and making the decision to exit a number of markets including Greece, Germany and Spain following regulatory changes. The group has now refocused its business model solely on regulated markets such as the UK and Gibraltar, as well as the new markets opening up in the US, although the company warned that the reshuffle would come at the expense of revenues in the short term.
The group declared a full-year dividend of 20.0 pence per share, a 54% increase on the 13.0 pence dividend it paid out a year earlier.
"Our strategy is working. The emphasis on sustainable revenues and our product and marketing investments are paying off, resulting in record revenues and profits," said Corcoran.
Betfair said it saw strong growth in mobile and its Sportsbook. Mobile revenues grew 70% in the year, and in the fourth quarter represented 64% of Sportsbook revenues.
"The focus in FY14 was on creating a competitive Sportsbook and we are now entering an exciting phase of product development to leverage both our Exchange and Sportsbook to stand out in a crowded marketplace," Corcoran added.
The company said the number of customers in what it called its "sustainable markets" were up 27% in the year.
Betfair said the introduction of the Sportsbook, increased television advertising spend, and the strengthening of its online marketing capability, have broadened its customer reach and led to a 54% increase in the number of customers acquired in the UK and Ireland.
"Our focus on efficiency has allowed operating margin expansion at the same time as increasing marketing and technology investment to approximately GBP200 million," Cororan said.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
BET.L