FTSE 250 online betting firm Betfair said it is reducing its exposure to markets with an uncertain regulatory future as new Chief Executive Officer Breon Corcoran announces significant cost savings.
Betfair said the UK business continued to perform well during the third quarter to date while regulatory impacts on international revenues continues to drag on growth.
The firm, which said it would pull out of Germany and Greece because of regulatory uncertainty, said group revenue increased 5% to £200.6m in the six months to October 31st. A good performance in sports and mobile offset weaker trading in games.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Corcoran, who said he had already identified cost savings of £20m, reported a 2% decline in underlying EBITDA from continuing operations to £42.3m.
Current underlying trading is in line with expectations with revenue up 7% in the third quarter to date after adjusting for regulatory impacts in Spain, Germany and Cyprus.
Corcoran noted: "The review we have carried out over the past four months has demonstrated a number of strengths. Betfair has a unique product offering, strong brand affinity and scale in the UK. However, we have also identified a number of areas requiring change and fixing these will take time. "
"Recent regulatory developments have been challenging and we are reducing our exposure to markets with an uncertain regulatory future. We will focus investment within regulated markets with sustainable revenues."
Betfair said it has reviewed its dividend policy and the medium term payout target had been increased to 40% of profit after tax.
CJ
