Italy, US are growth prospects for online gambling firm Betfair
Online gambling firm Betfair said it intends to expand its business in Italy and the US. The firm runs a platform which enables gamblers to bet against each other. Betfair pulled out from other markets, including Greece and Germany, due to tax rates and adverse policies. Reuters reported that Betfair has been looking to narrow its operations and reduce costs. It intends to concentrate its operations in fewer markets, which provides more secure returns.
Led by Chief Executive Breon Corcoran, Betfair reported that in the six months that ended in October, its revenues declined 6% to GBP 188 million or USD 308 million. However, the company beat the average forecast of analysts as its underlying earnings before interest, tax depreciation and amortization or EBITDA increased 16% to GBP 48.9 million. Betfair 's interim dividend also rose by 50% to 6 pence per share. The online gambling company has an estimated cash pile of GBP 200 million.
The company has also started to expand its conventional sports book betting, which makes it more appealing to mainstream gamblers. However, it also put the company in direct competition with Paddy Power and William Hill.
Corcoran said, "Betfair has continued to make progress against thestrategic objectives we set out in December 2012 and has delivered a good first half performance." He added that their focus, which is on regulated jurisdictions and Sportsbook-led acquisition, have continued to succeed.
After it rejected a takeover from private equity firm CVC Capital Partners in May, Betfair has been compelled to defend its strategy, Reuters reported. The takeover offer was valued at GBP 1 billion or USD 1.5 billion at a price of 950 pence per share. Although Betfair's share price rose 1.3% to 1,043 in early trading today, it still falls short of the GBP 13 per share level when the firm went public three years ago.