Betfair benefits from cost-cutting

Betfair is starting to reap the benefits of cost-cutting and its focus on attracting more punters in well regulated betting markets such as Britain and Ireland, the online gambling company said yesterday.

The company has been forced to defend its strategy after rejecting a £1bn takeover by private equity firm CVC Capital Partners in May.

First quarter revenues fell 13% to £90.4m in the three months to the end of July, reflecting a decision to pull out of markets including Greece, Germany, Cyprus and Spain, where regulatory risks or tax hurdles were too high.

The absence of a major international soccer tournament also depressed revenues compared to last year when the Euro 2012 competition pulled in gamblers.

However, profitability — in the form of underlying EBITDA — rose 16% to £24.9m in the quarter, helped by a cost-cutting programme that has seen the company shed 500 jobs from a peak of around 2,300 workers.

“Betfair’s first quarter performance is in line with our plan and leaves us on track to meet our expectations for the full year,” chief executive, Breon Corcoran said.

Betfair shares, which have climbed to two and a half year highs in recent weeks, were little changed at 990p yesterday morning, after a trading statement that was broadly in line with expectations. — Reuters