Shares in Betfair (LSE: BET) lifted by over 2.5% in early trade this morning, following positive interim results for the six months ended 31 October 2013.
The world’s largest internet betting exchange revealed that underlying pre-tax profit soared by 56% in the first half, to £32.5m from £20.9m in the comparative period last year.
This led to a 51% rise in basic earnings per share, and filtered through to shareholders in the form of a 50% increase in the interim dividend to 6p from 4p last year.
Today’s results come despite total revenue actually falling by 6%, with management saying this figure reflects “the recently lapped FY13 market exits”, although the second quarter saw sustainable revenue lift by 11%, which now constitutes 77% of total revenues (up from 71% at H1 FY13).
CEO Breon Corcoran commented:
“Our focus on regulated jurisdictions and Sportsbook-led acquisition continues to be successful. In the 12 months since we implemented this approach, the number of new customers acquired in the UK and Ireland is up 77%.Â
“Following cost reductions in the past twelve months we now operate as a leaner and fitter business, which means we can reinvest to generate revenue growth. Our sales and marketing budget is over £100m this year. This enables a top tier presence on Sky Sports, major investment in our online marketing capability and an exciting new partnership with Channel 4 Racing for 2014.
“We are also investing in international opportunities. Our online casino launched in New Jersey on 21st November and, while regulatory processes are always uncertain, we have made good progress towards launching an Exchange in Italy.
“Notwithstanding this incremental investment, the progress we have made in the first six months means we expect underlying EBITDA for the full year to be between £82m and £87m”.
