NEWS > ANALYSIS
return to alpha-male chest beating after several quarters explaining away underwhelming results. “The strategy is working. We have had early success and shown that the combination of the exchange and sportsbook can deliver a sustainable competitive advantage,” Betfair CEO Breon Corcoran said in a rallying call of a trading update. The return to positive thinking comes from “stronger than expected UK sportsbook revenues, particularly [in] the mobile channel”, according to Nick Batram at Peel Hunt. In hard numbers this translated to an estimated full-year EBITDA of £73m, ahead of its £65-70m guidance ?gure and a record number of customer acquisitions (up 108% year-on-year). Corcoran added in a somewhat mixed message that he saw growth in regulated territories and internationally. “While we are rightly focusing on regulated jurisdictions, primarily the UK and Ireland, I ?rmly believe there is a signi?cant international opportunity. We have recently seen positive regulatory momentum in Italy, Spain and the US. In addition, revenue from the countries where we have ceased marketing is proving relatively resilient due to the uniqueness of our exchange,” he said. It all becomes a little clearer when you add in the fact Betfair intends to spend some of its £168m cash on acquisitions. Once again there seems to be some kind of unconscious agreement between the major ?rms on the best strategic direction. It’s time, it seems, to break out the cheque book. “We intend to use our strong balance sheet to pursue a strategy of targeted acquisitions to add further domestic scale, achieve geographical expansion and close product gaps,” Corcoran said. Casino and bingo are both areas where Betfair lags behind most of its major competitors, so an acquisition in one of those areas would not be surprising. In the UK the most obvious targets would be in the ?xed-odds arena, but it will be interesting to see where it looks to internationally.
The ?nal countdown
from underperforming to barely mentioned in the Q1 round-up. Poker didn’t even merit a mention in Ladbrokes’ trading update in late April, while at Hills it was only mentioned in passing as suffering from decline in the period. Unibet posted a 13% decline in poker revenues and it is now just 6% of its overall business in terms of revenues. At Playtech, despite its best efforts to revitalise the ?agging sector, there was an 18% drop in revenues and poker has slipped to the fourth largest revenue generator from the four major verticals with both bingo and sports betting revenue posting higher numbers in the period. Poker remains an opportunity for growth, but operators are reluctant to invest in an area while they are reliant on a network software solution. And with bingo proving tough, the balanced portfolio is beginning to look a little unbalanced. For the foreseeable future, it remains mobile casino and sports betting that offer the best chance of growth. An analyst report at Investec predicts doubledigit growth in William Hill’s sportsbook until 2017, presumably driven by mobile in-play betting. But if you strip mobile out of the results, there remain a few worrying signs for the sector and there should prob X? H?H ??YH [\\?[???[? \?X\?H?? H??[?YY???? ?? ??] [?? ?]?[?Y\???X?[ H \?H\?Z?[ HH[Z]? H ^Y\? ?[ Y\?X?Y]?Y ??Y?[?[H[? ?[H ?]?[?Y\?]?H ??Y[??[Y[?[ ?Y]K] ??[?H [??\?H ?\??[YH ^H ?[[ ?^\? ?[XZ[? ??[? ?] ?[?H[?[??X\?[?? H ?Y?[?[HX\??] ?H ?X?]\??][?X[?H;? \?\?\?H[??\?[??X]?[ H[?[?[K ?][?[H ?? ??] [?? ?] ??HH ?Y??] Y??[?[? H?^ L?[? ?[?[H?\?[??{? [?][ H\? ??YH ?Y?{? X?[? \ ?YK??]?\?[? ??H;? \?\? ?] ?? ?[ \?H??[ ??H ? ?????[?\??[? H[?? YX\? ?\?[ ? ?][ ???HY?Z[?Z?[ H ??HXY[?? H X??\? [?H ?\?K [????\?]H[ \? [?? ?\??\? ?^YK\? [??[?[H???[? ?[?[?? ? ?Y\???]?\? \?H\?H ?X\??? ??H?]][?\?H ?\?[ ? ??[? ]\\??XX? H ????] ?[XZ[??^ ?[Y[ HY??X?[ ??[?H;? \?H ??H ? ???[?[??\? ?? X?\?X\?] H???\?? ??\?\???YH[???YHH ?Y? \?[?[??[??? ?] ?]?[?Y\??? L H YX\??^YX\???]?[?YH \? ^Y\?[? ??\? ?[XZ[?Y ?]X?]
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