MOBILE GAMBLERS have boosted third-quarter revenue at Betfair by 11 per cent as the online gambling exchange said it would meet full-year expectations.
Betfair, founded 12 years ago by one-time professional gambler Andrew Black and former JP Morgan trader Ed Wray, took €60 million worth of bets on the marathon Australian Open tennis final between Novak Djokovic and Rafael Nadal alone, highlighting the growing popularity of in-play gaming on major sporting events.
The company, which has struggled since it floated at £13 a share in 2010, said punters using mobile devices helped double mobile revenues to £5.8 million in the three months to January 31st, compared with the same period in the previous year.
Mobile revenue accounts for 7 per cent of total Betfair income – a figure the company has previously said could rise to 50 per cent by 2016.
Stephen Morana, Betfair’s interim chief executive, said trading remained good.
“Trading has remained encouraging in Q4, with revenue continuing to exhibit double-digit growth rates and this leaves us confident that we will meet our expectations for the full year,” Mr Morana said.
Overall revenue for the quarter was £85.3 million, while the company’s net gaming revenue for the financial year increased 5 per cent to £255.6 million.
Simon French, an analyst at Panmure Gordon, projects the company will make about £350 million in full-year revenue and £92 million in earnings before interest, taxes, depreciation and amortisation.
Betfair, which reported a net cash position, said it would continue a £50 million share-buy back programme after spending £37.5 million on it for the financial year to date.
However, Paul Leyland, an analyst at Investec, said there were significant risks to Betfair’s business in the medium-term.
“Betfair generates around 45 per cent of core revenue from non-regulated jurisdictions,” he noted.
“Regulatory change is coming in a number of key markets – eg Germany, Greece, Spain – and we believe this will significantly impact revenue.”
Betfair meanwhile has announced that Edward Wray, the co-founder of Betfair, will step down as chairman on Tuesday. Gerald Corbett, the deputy chairman, will replace him.
Mr Morana became interim chief executive in January, following the departure of David Yu. Mr Morana will stay in the post until Breon Corcoran, formerly chief operating officer of Paddy Power, takes over on August 1st next year.
Betfair shares fell 0.5 per cent to 881p. – (Copyright The Financial Times Limited 2012)
€169,970:
The average value of bets placed with Betfair every minute of the 353-minute Australian Open final between Djokovic and Rafael Nadal – the longest final in history.
