5th Sep 2013 08:09
LONDON (Alliance News) - Betfair Group Limited Thursday said it saw an expected drop in first quarter revenue, as its continues to refocus its business model on regulated markets and capturing more customers through its sportsbook product.
The online betting and gaming operator said it is attempting to move to a more stable long-term business model, although it may be at the expense of revenues in the short term.
It said that revenue during the three months to July 31 fell 13% to GBP90.4 million, compared with revenue of GBP103.8 million a year earlier, largely due to new regulations, the withdrawal from unregulated markets such as Greece, and the absence of a major football tournament in the period.
Betfair reported a 7% drop in revenue in the markets in which it intends to remain to GBP69.9 million, and a 28% fall in revenue from other markets to GBP20.5 million.
Betfair said its underlying earnings before interest, taxes, depreciation and amortisation was up 16%, boosted by cost savings. It said its underlying EBITDA margin also improved by 6.8 percentage points to 27.5%.
The company said it increased its "sustainable" revenue mix to 77% of group revenues, meaning revenue from those markets in which it intends to remain, helped by its re-focus on regulated markets.
"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% increase in active customers in sustainable markets in the period...and leaves us on track to meet our expectations for the full year," said Chief Executive Officer Breon Corcoran in a statement.
Betfair said that it has introduced the first of many exchange-based features to its sportsbook product, which now allows customers to lock in profits on singles and accumulators.
It also said that it recently launched its biggest ever television advertising campaign, to coincide with the new football season, and in August the number of its UK customers rose by 26%.
Betfair Group shares were trading 2.10 pence lower during early trading Thursday, at 989.90p per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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