Online betting firm scores big after World Cup helps net 39% profit rise

Online gambling company Betfair reported strong growth in quarterly profit yesterday, thanks to the World Cup, and defended its accounting policies after an error relating to past dividend payments.

Online betting firm scores big after World Cup helps net 39% profit rise

Betfair said it generated almost £16m (€20m) in revenues from the tournament in Brazil, more than double what it made during Euro 2012.

This helped to lift core profit by 39% to £34.5m in the three months to the end of July, the first quarter of its financial year.

“We are encouraged by the performance in the first quarter and the momentum of the business, and accordingly remain confident that we can deliver our expectations for the full year,” chief executive Breon Corcoran said.

Betfair, which operates an exchange that allows gamblers to bet against each other, has sought to attract more mainstream customers by developing products where the bookmaker sets the odds centrally.

Speaking to shareholders at the company’s AGM yesterday, chairman Gerald Corbett apologised for an error that resulted in it paying dividends in the past three years without its parent company having adequate reserves to cover the payments.

“It’s disappointing. I’m sorry that it has happened,” Mr Corbett told a sparsely attended meeting at the company’s headquarters in west London.

The mistake had prompted a call for investors to vote against the company’s latest set of annual accounts.

Mr Corbett described the error as a technicality. Betfair is profitable and generating cash, he said, adding that he retains confidence in auditor KPMG. Explaining the error, which it flagged in its annual report, Betfair said that funds to cover payouts had been held by a subsidiary rather than at parent company level and that this had now been rectified.

— Reuters

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