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FY11 Results Announcement

29 Jun 2011

'Year of significant change and progress brings record revenue and strong profitability'

Betfair Group plc (LSE:BET), the world's biggest betting community and one of the world's leading online betting and gaming operators, today announces its audited results for the 12 months ended 30 April 2011.

Underlying1 Reported
  FY11
£m
FY10
£m
%
change
FY11
£m
FY10
£m
%
change
Group revenue 368.6 340.9 8.1% 393.3 340.9 15.4%
Adjusted EBITDA2 73.2 53.5 36.9% 79.7 53.5 49.0%
Profit after tax 35.1 22.7 54.4% 23.0 15.1 52.2%
Basic earnings per share 33.9p 21.7p 56.2% 22.6p 14.4p 49.1%

 

  • Core Betfair revenue growth of 7.8% to £330m
  • Core Betfair adjusted EBITDA up 29% to £80.2m
  • Underlying earnings per share up 56% to 33.9p1
  • Maiden final dividend of 5.9 pence per share declared
  • Cash position at 30 April 2011 of £155.0m with no debt (FY10: £150.9m)
  • Customer funds held on deposit at 30 April 2011 of £305.6m (FY10: £284.0m)

Key developments

  • Record year for site activity with the number of bets matched increasing 20% to 916 million
  • Strong performance in Sports driven by growth of 24% in football revenues
  • Transfer of licence for UK Sports Exchange to Gibraltar
  • Legislation passed for exchange wagering in California and New Jersey
  • Listing on the London Stock Exchange
  • Announced intention to repurchase up to £50m of shares

Commenting on the results, David Yu, Betfair’s Chief Executive Officer, said:

"The past 12 months have seen significant change at Betfair as the business continued to grow and made the transition to being a public company. A huge amount has been achieved during the period and I'm delighted that we have more customers than ever resulting in a record number of bets placed and that we've reported record revenue and profitability.

"Despite these successes, revenue growth during FY11 could have been stronger but we have delivered a significant improvement in margin resulting in profitability for the year above expectations.

"We look to next year with confidence as we execute a strategy that we believe will cement our position as the leading online sports betting operator. Betfair is a great business with many opportunities for growth. We are focused on delivering long-term shareholder value through a combination of accelerating our revenue growth, driving further margin improvement and returning excess cash to shareholders."

With regard to current trading and outlook, David Yu commented:

"We are pleased with trading for the first eight weeks of FY12 for non-risk Sports, Games and Poker which is in-line with our expectations. Revenue in the more volatile area of risk Sports, however, is currently below expectations due to an adverse margin performance during May. As anticipated, Core Betfair revenue in this period is lower than the prior year comparative period which was significantly inflated by the World Cup and was the last quarter prior to the migration of our Poker product.

"The last 12 months have presented challenges and we have redoubled our efforts and focused the business on a clear vision of how to deliver stronger revenue growth in the future. FY12 will be an important year of execution for us, albeit against the backdrop of an unclear economic outlook. Many of the new products we expect to drive future growth will launch in the second half of the year. Accordingly, we expect to make progress in FY12 and for growth to accelerate in the following years. The timing and impact of regulatory developments remain uncertain and difficult to predict, although our product plans will leave us well placed to react to any such change. We also expect to continue improving Core Betfair adjusted EBITDA margin towards our medium-term target of 30%.”

1 Underlying figures are stated after making a number of adjustments in order to aid comparability between periods. These adjustments involve the exclusion, where relevant, of: the revenue and EBITDA from the High rollers segment; exceptional items; equity settled share-based payments; profit on sale of financial asset; and the associated tax effect of these adjustments. A reconciliation of reported figures to underlying figures is set out in Appendix 1

2 Excluding exceptional items and equity settled share-based payments

For more information, please contact:

Media:
Tessa Murray
Director of Corporate Communications
Tel: +44 20 8834 6794
tessa.murray@betfair.com

Investors / Analysts:
Mark Brooker
Director of Corporate Development
Tel: +44 20 8834 6286
mark.brooker@betfair.com

   

Powerscourt
Rory Godson
Paul Durman
Roddy Cameron
Tel: +44 20 7250 1446

 

Analyst results webcast

There will be a live webcast of the results presentation at 9.30 a.m. GMT. Please pre-register for access to the webcast by visiting the group website (http://corporate.betfair.com). A copy of the webcast and slide presentation given at the meeting will be available on the Group's website later today.

About Betfair

Betfair is the world's biggest betting community and one of the world's leading online betting and gaming operators.

At the heart of Betfair is its pioneering Betting Exchange, where customers come together in order to bet at odds set by themselves or offered by other customers, instead of with a traditional bookmaker. The Betting Exchange provides customers with better pricing and more choice and flexibility than competing products, which has resulted in Betfair's customers showing greater levels of loyalty than its competitors with significantly higher customer satisfaction rates.

Betfair additionally offers a range of other sports betting products, casino games and poker. As at 30 April 2011, Betfair had more than 3 million registered customers worldwide and processed, on average, more than 7 million transactions per day on the Betting Exchange, more than all European Stock Exchanges combined during the preceding 12 month period.

Betfair also owns Betfair US, which comprises TVG (a licensed US horse racing wagering and television broadcasting business) and a development office in California, and 74.8% of LMAX, which operates an exchange platform for online retail financial trading which has evolved from Betfair's exchange platform technology. In addition, Betfair has a 50% holding in Betfair Australia, a joint venture which operates a licensed betting exchange business in Australia.

The Betfair Group employs more than 2,000 people and has twice been named the UK's 'Company of the Year' by the Confederation of British Industry and has won two Queen's Awards for Enterprise, being recognised for Innovation in 2003 and most recently for International Trade in 2008.

Disclaimer

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any securities of Betfair Group plc (“Betfair”). Neither this announcement nor the fact of its distribution constitutes a recommendation regarding any securities.

Certain statements, beliefs and opinions contained in this announcement, particularly those regarding the possible or assumed future financial or other performance of Betfair, industry growth or other trend projections are or may be forward looking statements. Forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “plans”, “goal”, “target”, “aim”, “may”, “will”, “would”, “could” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond Betfair's ability to control or predict. Forward-looking statements are not guarantees of future performance. No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved.

Neither Betfair, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements.

Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Services Authority), Betfair is not under any obligation and Betfair expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per Betfair share for the current or future financial years would necessarily match or exceed the historical published earnings per Betfair share.

Certain data in this announcement, including financial, statistical and operating information, has been rounded. As a result of such rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to 100%.

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