Betfair annual financial results
Betfair's latest annual report is out for the year to 30th April 2008. You can read the full edition by clicking on this link.
Revenue, of which the vast majority is commission paid by punters, is up 29% to £240 million. So it looks like Betfair were not exactly struggling before they decided to implement the premium charge.
Operating profit was up to £28m from £20m. It is difficult to work out the detail on this as more, or less, marketing spend will always drop straight to the bottom line. In short if you choose to splurge money on marketing you will make less profit and vice versa.
Interest received on client deposits and cash in the bank was £9.9m up from £7.1m. I forecast this will drop a lot next year as people will probably not look to hold money on tap in Betfair any more. I always had large amounts in Betfair for opportunistic purposes but since the introduction of the premium charge I have pretty much cleaned out all my accounts and now choose to shuffle money in and out as required. More hassle but it will save me a lot of money.
If you look at the balance sheet it appears people have been moving money already. Cash in hand and at the bank has dropped by £70m to roughly £111m. In previous years nearly all the cash on the balance sheet has been client deposits. It's the first time since Betfair came into being that client deposits have dropped year on year.
Overall not the report of a company that is struggling. So the introduction of new charges doesn't appear to be for structural reasons by the look of it.
Revenue, of which the vast majority is commission paid by punters, is up 29% to £240 million. So it looks like Betfair were not exactly struggling before they decided to implement the premium charge.
Operating profit was up to £28m from £20m. It is difficult to work out the detail on this as more, or less, marketing spend will always drop straight to the bottom line. In short if you choose to splurge money on marketing you will make less profit and vice versa.
Interest received on client deposits and cash in the bank was £9.9m up from £7.1m. I forecast this will drop a lot next year as people will probably not look to hold money on tap in Betfair any more. I always had large amounts in Betfair for opportunistic purposes but since the introduction of the premium charge I have pretty much cleaned out all my accounts and now choose to shuffle money in and out as required. More hassle but it will save me a lot of money.
If you look at the balance sheet it appears people have been moving money already. Cash in hand and at the bank has dropped by £70m to roughly £111m. In previous years nearly all the cash on the balance sheet has been client deposits. It's the first time since Betfair came into being that client deposits have dropped year on year.
Overall not the report of a company that is struggling. So the introduction of new charges doesn't appear to be for structural reasons by the look of it.
posted by Peter Webb at
9:49 AM
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