LONDON (Alliance News) - Bookmaker Betfair Group PLC on Wednesday said its pretax profit declined in the first half due to one-off effects, but its operating profit increased and its revenue rose, prompting a huge dividend hike, as it works towards completing its merger with Irish rival Paddy Power PLC.
Betfair said its pretax profit for the half to the end of October was GBP66.3 million, down from GBP67.3 million a year earlier due to some one-off financing expenses and a gain it made a year earlier from the sale of its stake in a joint venture not repeating.
Operating profit for Betfair, however, increased to GBP67.2 million from GBP59.9 million as its revenue for the half increased to GBP274.4 million from GB237.6 million, despite coming against a tough comparative as the World Cup fell in the period a year earlier.
Growth in revenue was driven by its Sportsbook, where volumes rose 93% year-on-year. For the second quarter, Betfair said its number of active customers in sustainable markets rose by 31%, with revenue rising 16% in the quarter, slightly ahead of the first quarter. Mobile growth remained robust, while US revenue increased 35%.
The company will pay an interim dividend of 15.0 pence per share, up from 9.0p a year earlier, a 67% rise, reflecting its strong cash flow and its higher payout ratio.
The group said its merger with Paddy Power remains on track to complete in the first quarter of 2016, subject to shareholder and regulatory approval.
"Betfair traded strongly in its key markets throughout the first half of 2016. These results, which came against a tough comparative period featuring last year's football World Cup, are ahead of our original expectations and demonstrate the group's continued strong momentum," said Breon Corcoran, Betfair's chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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