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    BETF   GB00B44JTH01

BETFAIR GROUP LTD

(BETF)
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Betfair : H1 FY15 Results Announcement

12/04/2014 | 02:09am EDT
H1 FY15 Results Announcement

04 Dec 2014

Betfair Group plc ("Betfair")

Interim results for the six months ended 31 October 2014

"Record results and £200m return of capital to shareholders"

Summary

Underlying1, 2
Six months ended 31 October 2014, unaudited H1
FY15
£m
H1
FY14
£m
Change
%
Revenue 237.6 188.0 +26%
EBITDA ¹ 73.9 48.9 +51%
Operating profit 59.9 33.0 +82%
Profit before tax 67.3 31.7 +112%
Underlying profit before tax ² 60.9 32.5 +87%
Earnings per share 55.0p 25.9p +112%
Underlying earnings per share ² 48.9p 26.2p +87%

Financial highlights

  • Revenue up 26%, driven by strong customer base growth and successful Gaming cross-sell, as well as the World Cup and favourable sports results
  • Excluding the World Cup and unusually high gross win margins, revenue was up 12%
  • Strong revenue growth resulted in EBITDA up 51% to £73.9m
  • Underlying free cash flow up 186% to £67.2m

Operational highlights

  • Active customer base up 50% to over one million following record activations and increased loyalty driven by our signature Cash Out and Price Rush products
  • Mobile revenue more than doubled and now represents 70% of Sportsbook revenue
  • Gaming revenue up 44% following a 63% increase in the number of Sports customers using Gaming products for the first time
  • Betfair US revenue up 17% as TVG launches the first Apple approved US horseracing betting app

Returning capital to shareholders

  • Announcing a cash return of £200m to shareholders
  • Interim dividend up 50% to 9.0 pence per share
  • Increasing the medium term dividend payout target to approximately 50% of earnings

Outlook

  • Now expecting full year EBITDA of between £97m and £103m

Breon Corcoran, Betfair's Chief Executive Officer, said:

"These results demonstrate strong delivery against our strategy for achieving sustainable growth that we outlined two years ago. We have substantially strengthened our competitive position by investing in products that differentiate Betfair and by enhancing our marketing capabilities in a crowded market place.

Innovative products such as Cash Out, Cash Back Extra and Price Rush, coupled with a relentless focus on providing value through market leading promotions and odds, have allowed Betfair to acquire and retain more customers than ever before. Over one million customers bet with us in the first half of the year, a 50% increase on last year.

Our focus on regulated jurisdictions is also paying off. Revenues from sustainable markets grew by 32% in the first half of the year and now contribute more than 80% of total revenues.

Betfair has also delivered considerable operational gearing and, as a result, strong top line growth has led to substantial EBITDA margin expansion and strong cash generation. In the last 12 months, Betfair has generated underlying free cash flow of £114.1m and had £271.4m of corporate cash at 31 October.

In view of this, and the substantial cash flow generated, we are today announcing a £200m return of capital to shareholders and an increase in our targeted dividend payout ratio.

This will leave Betfair with a more efficient capital structure whilst retaining flexibility to invest in the business and pursue strategic options.

The performance in the first six months of the year, coupled with the momentum we take into the second half, means we now expect EBITDA for the full year to be between £97m and £103m."

1. EBITDA is defined as Group operating profit before net finance income / (expense), tax, depreciation and amortisation.

2. Underlying figures for the current period exclude the £6.4m gain recognised on the disposal of Betfair's stake in Betfair Australia. Underlying figures for the prior year exclude net foreign exchange losses and the associated tax effect of the adjustment. A reconciliation of reported figures to underlying figures is set out on page 10.

For more information, please contact:

Investor Relations:
Paul Rushton
Tel: +44 20 8834 6139
Corporate Communications:
James Midmer
Tel: +44 20 8834 6843

Analyst and investor results webcast

There will be a live webcast of the results presentation at 10.15 a.m. GMT. Please pre-register for access to the webcast by visiting the Group website (http://corporate.betfair.com). A copy of the webcast and slide presentation given at the meeting will be available on the Group's website later today.

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