Betfair H1 results – Exit LMAX – Rev up, earnings down 25%
A right old mixed bag in Betfair’s results this morning. Official results here: –
https://corporate.betfair.com/media/press-releases/2012/13-12-2012.aspx
If you want the full set of results, regulatory disclosure and detailed extracts, please visit the Bet Angel forum.
As expected Betfair’s new CEO taking the opportunity to hit the reset button on the business. This is a very common practice for incoming CEO’s and will allow better comparitive results this time next year. This set of results you can take in any number of ways depending on whether you include or exclude items. Some businesses have been discountinued, others shifted and you also have a huge impairment value, but this is a non cash item. You also have territories that have been exited which are not included in the headline results. There is a lot going on in these results. But the overall theme is that Betfair are exiting business where the outlook is weak and focusing on core business. The new CEO has also restructed / is restructing the business internally to align interests to each core segment.
Highlights from the report: –
- Overall revenue, on continuing operations, i.e. excluding business they have exited, up 5%
- EBITDA down 2% on increased marketing spend
- Change in dividend policy to increase cash paid to shareholders
- £80.6m of impairment to goodwill (Write down of previous values of investments)
- Exit of LMax financial exchange and Kaboom
Commenting on today’s announcement, Breon Corcoran, Betfair’s Chief Executive Officer, said:
“This is a solid set of results for the first six months of the year. We are now pursuing a new and more focused strategy to address the business’ challenges and exploit its market opportunities. The review we have carried out over the past four months has demonstrated a number of strengths. Betfair has a unique product offering, strong brand affinity and scale in the UK. However, we have also identified a number of areas requiring change and fixing these will take time.
“Recent regulatory developments have been challenging and we are reducing our exposure to markets with an uncertain regulatory future. We will focus investment within regulated markets with sustainable revenues. Creating a simpler product that retains the key advantages of the exchange, combined with investment to return the brand to its previously strong position, will allow us to increase our audience and accelerate revenue growth.
“I’m excited to be leading Betfair through this change and proud of what we’ve achieved over the last four months”.
Category: Betfair
