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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.”
Reader views (1)
If Betfair is floated how much will it be capitaled at and where's the 'yardstick' for any realistic valuation?
- Teresa Rodgers, Brussels - BE, 05/08/2009 16:12
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