Betfair (LSE: BET) has revealed that a “simpler, more familiar product” is attracting more new customers now than in the company’s previous history, helping the bookmaker increase UK customer acquisition by 65%.
The Sportsbook offers ‘back-only’ fixed-odds betting, and exists as a standalone site to Betfair Exchange, in which punters can back, lay, trade, ask for a better price and Cash Out — the latter feature having been added to the Sportsbook’s functionality, providing a “differentiated customer experience”.
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Promotions feature heavily in Betfair’s Sportsbook, too, emulating success seen most prominently in the industry at Paddy Power — and it’s no coincidence that CEO Breon Corcoran arrived from the Irish-based bookmaker in August last year.
Corcoran has overseen a year of transition since his arrival, with revenues lost due to changing regulation leading Betfair to replace them with “regulated, more sustainable revenues”. In today’s results, he went on to say:
“A new management team is leading the business, a wide ranging restructuring has been completed ahead of schedule [and] marketing investment has been focused on core markets.
“Although it remains early days for many of these initiatives, we remain pleased with the operational trends we are seeing, which give us confidence that the steps we are taking will deliver a higher quality, sustainable and growing business.”
“We have made excellent progress on all of our key strategic aims and the business is in a far stronger position to generate future growth than it was at the start of the year.”
Elsewhere in the results, Betfair saw total revenue stay flat, ahead of previous guidance, although there was a 27% reduction in underlying pre-tax profit compared to the previous year, mainly due to development spend and regulatory impact. Free cash-flow generation remains strong, at £5o.2m compared to £43.8m in FY2012.
Shareholders will be pleased with a 27% increase in the full-year dividend, too, at 13p following the 9p proposal for the final dividend. At 840p, this gives a yield of around 1.6% — but it’s Betfair’s growth prospects that will attract investors, with today’s news doing no harm.
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> Sam does not own shares in Betfair.