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The odds shortened today on a flotation of Betfair after the world's largest betting exchange reported soaring revenues and profits.
In stark contrast to the falling business in the High Street bookmakers as witnessed yesterday by a profit warning from William Hill, Betfair today reported revenues of £303 million in the year to the end of April, up 27% year on year and double where they were three years ago.
Since then the exchange has tripled its active user numbers to 650,000. Profits for the year were up 29% at £72 million.
“It is hard to believe where we are, considering the world recession and the severe effect on leisure spending,” said chief executive David Yu.
“There is a progression to online betting [away from the High Street] as people want to be more selective on what they bet on and find better value.”
Betfair makes its money by taking commission of up to 5% on the winnings of the matched bets of either punters or those choosing to act as the bookmaker on its site.
Betfair is 25% owned by founders Bertie Black and Ed Wray and 20% by Softbank of Japan, with another 25% in the hands of private equity, and has been a hot tip for a float.
“We don't need to raise capital but we will need a liquidity event [to allow shareholders to cash in],” said finance director Stephen Morana. “A float is an obvious option.”
