Press Release

H1 FY13 Results Announcement
13/12/2012

Interim results for the six months ended 31 October 2012

Betfair (LSE:BET) today announces its unaudited results for the six months ended 31 October 2012.

Group summary

Underlying1, 2 Reported2
Unaudited H1
FY13
£m
H1
FY12
£m
Change
%
H1
FY13
£m
H1
FY12
£m
Change
%
Group revenue 200.6 191.2 +5% 200.6 191.2 +5%
EBITDA 42.3 43.1 -2% 38.5 43.1 -11%
Profit before tax 21.0 27.0 -22% (64.0) 27.5 N/A
Basic earnings per share (p) 17.4 23.2 -25% (58.9) 23.4 N/A
             

Strategic highlights

  • Plan to reinvigorate the business announced, with three key elements:
    • Focus on regulated jurisdictions to increase sustainability of revenues
    • Invest in product and brand to enhance our competitive position and drive growth
    • Introduce greater accountability and become a leaner and more dynamic business; c.£20 million of savings identified to date
  • Exiting from investments in LMAX and Kabam
  • Dividend policy reviewed: medium term payout target increased to 40% of Group profit after tax, reflecting confidence in long term outlook and increased capital discipline

Financial highlights

  • Changed approach to reporting:
    • focus is on Group numbers rather than Core
    • share based payments are included in underlying financials
    • applying a more conservative approach to the capitalisation of future development costs
  • Group revenue from continuing operations up 5% to £200.6 million, driven by a strong sports and mobile performance2
  • Group underlying EBITDA from continuing operations down 2% to £42.3 million, as marketing investment offsets revenue growth1, 2
  • Group underlying earnings per share down 25% to 17.4 pence due to a higher depreciation and amortisation charge following increased capital expenditure in the prior year1
  • Interim dividend up 25% to 4.0 pence per share
  • Non-cash impairment of goodwill and other intangible assets of £80.6 million
  • Current underlying trading is in-line with expectations: revenue up 7% in Q3 to date after adjusting for regulatory impacts in Spain, Germany and Cyprus.
  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 separately disclosed items (restructuring costs and impairments) and the associated tax effect of these adjustments.  A reconciliation of reported figures to underlying figures is set out in Appendix 2.
  2. Continuing operations (excludes LMAX exchange)

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”.

For more information, please contact:

Media:
Leonie Foster
Head of Corporate Communications
Tel: +44 20 8834 6084
leonie.foster@betfair.com
Investors / Analysts:
Paul Rushton
Head of Investor Relations
Tel: +44 20 8834 6139
paul.rushton@betfair.com
   
Powerscourt
Victoria Palmer-Moore
Tel: +44 20 7250 1446
 
   

Analyst and investor 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.

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