No surprises in Betfair´s first quarter

The UK online gambling group Betfair plc has reported an expected 7 percent drop in first-quarter revenue, with Q2-2012 nevertheless starting well.
“Trading has been encouraging in the second quarter, including a good start to the football season,” the company said in a statement Tuesday.
Core revenue – sales from the group’s betting exchange plus other sports betting products – rose 12 percent in August versus the same period last year, and management observed that the company is comfortable with its full-year outlook.
However, first-quarter revenue fell 7 percent to GBP 80.8 million compared with the same period last year, when the World Cup football gave business a major boost.
The company’s share price continues to struggle, having dropped 60 percent to 628p Monday from highs of more than 1,600p achieved shortly after the company listed last October.
The interim management statement showcased the following Q1-2012 numbers:
· Core Betfair revenue down 7 percent to GBP 80.8 million against a record comparative period
· Strong Mobile growth: 7.4 million bets (up 94 percent) and GBP 4.2 million of revenue (up 78 percent)
· Encouraging current trading: Core Betfair revenue up 12 percent in August 2011
· Share buy-back programme underway: 1.7 million shares repurchased to date for GBP 11 million
Chief executive David Yu said: “I am pleased with our performance in the quarter. Betting Exchange revenue was flat compared to Q1 FY11, which was significantly boosted by the World Cup, and is up 19 percent over the last two years.
“Our unique business model means that Betfair continues to offer customers superior value and this resulted in our best ever Royal Ascot, Wimbledon and Open Golf Championship. The Exchange continues to be vibrant and, importantly, we have started to deliver on our plan to improve the monetisation of this activity through the dual levers of more customer education and targeted pricing changes.
“Overall Sports revenue was impacted, however, by lower revenue from our risk products due to adverse sporting results in May as previously reported. Since May, margins in risk products have returned to historical levels.
“Our mobile products have seen particularly strong customer traction in the quarter, with around one third of Sports customers using a mobile device to place a bet. The 7.4 million mobile bets placed in the quarter was almost double the number made in the same period last year. The broad reach of our mobile products across 17 languages and multiple platforms gives us a strong base for continued growth.
“Trading has been encouraging in the second quarter, including a good start to the football season. Consequently, Core Betfair revenue in August was up 12 percent versus the same period last year and, whilst it is still early in the financial year and the economic environment remains uncertain, we remain comfortable with the outlook for FY12.”

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