Focus on sustainable revenues
· Sustainable revenues up 11% in Q2 and now represent 77% (H1 FY13: 71%) of total revenues
· Overall revenue declined 6% in H1, reflecting the recently lapped FY13 market exits
Broadening our addressable market
· Sportsbook-led customer acquisition strategy is working: UK & Ireland active customers up 25% in H1
· Exchange / Sportsbook combination is showing signs of early success:
- 38% of sports betting customers used both products in H1
- 32% of new UK&I Exchange customers initially joined via the Sportsbook in H1
- Automated integration of Exchange and Sportsbook expected in Q4
· Mobile revenue up 70% in H1 and now more than half of Sportsbook revenue
International opportunities
· Strong revenue and margin performance in Betfair US
· Online casino launched in New Jersey
Financial highlights
· Underlying EBITDA up 16% to £48.9m and underlying EBITDA margin up 5ppts to 26%
· Underlying free cash flow up 52% to £23.5m
· Interim Dividend up 50% to 6.0 pence per share
· Expecting full year underlying EBITDA of between £82m and £87m in FY14, including combined start-up losses of between £5m and £10m in Italy and New Jersey.
Commenting on today's announcement, Breon Corcoran, Betfair's Chief Executive Officer, said:
"Betfair has continued to make progress against the strategic objectives we set out in December 2012 and has delivered a good first half performance.
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%.
We continue to see evidence that our Exchange and Sportsbook products are complementary, with 38% of sports betting customers using both products. This overlap is set to increase in the coming months following innovative developments to our bet matching technology, bringing the benefits of Exchange-based pricing to Sportsbook customers.
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".
