Betfred suffers loss despite revenue increase

UK bookmaker Betfred reported an eight-figure loss in the last financial year, in spite of registering healthy rise in revenues.

The total operating loss is £13.4 million. Last year, the company recorded a profit of £32.4 million. The company attributed the loss to the decline on a goodwill impairment of its digital assets, rising running costs and higher gaming taxes.

The company’s revenue rose by 9.6 per cent to reach £634.5 million and earnings grew by 3 per cent to £83.3 million. The overall gambling turnover from all its channels – retail, online and Tote divisions – increased by 17.5 per cent to £12.7 billion.

The company’s acquisition of 322 Ladbrokes Coral betting shops in October 2016, its Totepool business deal with the Hong Kong Jockey Club and an overall surge in its online customer base have contributed to the rising revenues.

Regulus Partners analysts estimated that Betfred’s online revenue improved 3 per cent year-on-year to £90m, while the Tote improved 12 per cent to £329m, although some of that latter figure was shared with Betfred’s B2B partners.

Predictably, the usual anti-gambling suspects in the UK media are playing up the fact that Betfred founder Fred Done chose to take a £10.2m annual dividend, the same as last year.

These media types acidly note that Betfred announced last month that it could be forced to close up to 900 betting shops and lay off up to 4500 staff if the government follows through with its plan to cut the maximum stake on fixed-odds betting terminals (FOBTs) from £100 to just £2. Last week, the government announced that the FOBT stake cut won’t happen until 2020.

Regulus noted that 83 per cent of Betfred’s earnings were generated at the retail level – where the aforementioned FOBTs reside – which puts the company “in a particularly difficult position” given the government’s current stance. As a result, Regulus suggested Betfred’s “core business is likely to require structural change.”

Source: CalvinAyre.com