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Accounts to 30 April 2008 of the new Betfair holding company, Betfair Group Limited, today showing on public file (apologies if already reported elsewhere).
Extracts of potential interest:
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The Group has continued to build on the strategy put in place during the preceding 12 months as it continues its evolution from a predominantly UK based betting exchange to the leading legal global e-gaming site.
…• Full year revenue growth of 29% to £239.7m
• EBITDA up 32% to £42.3m
• Profit after tax up 54% to £29.Sm
..• Revenue from non-UK customers now accounts for 44% of total revenues (2007: 38%)
• Over 1.7m registered users (2007: 1.2m)
…..• Continuing technological investment means the combined products now handle, on average, 5 million transactions a day. This year we matched more trades than every preceding year combined
…
• Launched an Italian sports betting site under our Italian state issued licence…..
……..allowed shareholders to achieve liquidity for up to 10% of their shares……to summarise the Scheme, shareholders of TSEL elected to receive cash from BOL of £ 13.2005 per share in respect of the cancellation of 8,499.135 TSEL shares……
…………..
Key Performance Indicators (GBP):Total Group revenues – 239.7m (2007- 185.9m) +29%
International revenues – 105.4m (2007 – 72.3m) + 46%Customer balances held on deposit – 227.6m (2007 – 173.7m) + 31%
…….Our industry is characterised by significant regulation and we continue to be proactive in our approach to it. We block all customer registrations from the US. China and Japan, and during the year also switched off all customers from Turkey. We also limit our marketing activity in certain other locations in line with our prudent regulatory risk policy, whilst continuing to work with regulators and governments.
Revenues from our Australian joint venture grew 22% this year, despite the Equine influenza outbreak that struck Australia. The resumption of a full racing programme. together with a planned increase in marketing activity following on from the successful court case brought against the Western Australian Government. should see revenue growth improve further in the coming year.
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The strategic investments undertaken during the year include:
• In November we launched our new Betfair Starting Price (BSP) product which took 30 man years to develop. This aims to attract the large amount of customers who want to place a bet without having to understand the complexities of the exchange. Backers and layers can choose to take the BSP, and the actual return price (the starting price) is calculated when the event begins. From a price comparison perspective, since launch on UK horse racing our average returned odds are some 30% higher than the existing industry SP.
• We have invested significantly in Tradefair during the year. This is our first application of Betfair’s exchange platform outside the betting industry. Tradefair’s vision is to apply the key assets of the Betfair technology, user base and operational expertise into the online retail financial derivatives market.
• The Betfair community remains vibrant, with ever increasing content added to our site. The sports category pages provide relevant betting-related sports stories, and Betfair radio, an online radio station, provides up-to-the-minute information on Betfair prices, as well as live commentary on all UK racing. The integration of the Timeform product with our UK racing site provides a one stop shop for quality form guides and an integrated betting platform. We now stream all UK horseracing pictures, together with thousands of other live sporting events, and our forum continues to be the home of lively and stimulating debate.
• The Betfair site continues to be one of the most popular and technically demanding web sites in the world. We regularly process 5 million transactions in a day, and settle them all in real time – to put this into context this is at least three times more than every European stock market combined. The directors believe that the continued investment in our back end technology is critical to the long term success of the Group.
• We invested £3.5m in a joint venture with Top Up TV, the UK’s leading provider of freeview technology.This joint venture will target the interactive TV market.
• We continue to bring innovative new ideas to the market. The latest venture is a new game which brings together the skill of sports betting with the fun of a multi-player tournament. This product was launched in early May 2008 under the name Taikai.
• We have further invested in our Maltese operations which is central to our business strategy. We have over 150 staff members in place there, running our international business as well as our Poker and Games products.
• The 2005 Gambling Act came into force on I September 2007. As a UK licence holder, we can now advertise on television, which we have done with considerable success.
……
The following expenses have been included in arriving at the Group profit before tax :
Gross Profits Tax – GBP 24.0 m (2007 – GBP 19.5m)
UK Horseracing Levy – GBP 6.88m (2007 GBP 5.89m)…….
Other income:Income from the management of customer balances – GBP 8.87m (2007 – GBP 5.69m)
……….
Employees and Directors:
The average number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:
Corporate and administration; 2008 – 175 (2007 – 149)
Product development 2008 – 466 (2007 – 242)
Operations: 2008 – 323 (2007 – 430)
Sales and marketing 2008 – 177 (2007 – 85)Total 2008 – 1,141 (2007 – 906)
At 30 April 2008 the Group had 1,237 employees (2007: 1.050).
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best regards
wit
The non-UK account holders will be arbers. With an increasing number of bookmakers/sportsbooks having software linked to Betfair, prices, arbs etc. this will likely reduce over the next few years.
The non-UK account holders will be arbers.
An interesting assumption based on what precisely?
Call it a hunch David. Betfair’s sports offering isn’t strong enough on the sports that European (for want of a better example) punters will look to – the genuine punters bet Handball, Volleyball, Bandy, Floorball and ULEB.
You only need to look at the liquidity on those sports to realise that nobody would want to be at the prices people seem prepared to lay on them.
The other option of course is that there’s far more UK/Irish punters betting from other European countries (think Spain, France etc.) or that they’ve really hit gold with the Australian market.
Dont know Robin, but all non UK customers have their transactions and accounts operated from Malta.
The thing that strikes me is that they are still little more than a medium size business turning a decent profit, particularly given the economic climate.
I always perceive them to be a bigger organisation.
Other income:
Income from the management of customer balances – GBP 8.87m (2007 – GBP 5.69m)
Anyone have any clue as to how that nice little earner works? Is it to do with interest realised on aggregated customer balances?
If the Betfair Forum is to believed it’s from laying horses who’ve fallen seconds after they’ve fallen but before you see them on TV ie. having a faster feed straight into the Betfair offices
Other income:
Income from the management of customer balances – GBP 8.87m (2007 – GBP 5.69m)
Anyone have any clue as to how that nice little earner works? Is it to do with interest realised on aggregated customer balances?
Has to be
I’ve had a credit balance on my account for about 5 years and they’ve never paid me a penny interest!
I work in Financial Services and my firm have a similar, perfectly legitimate, "scam" where we buy a product for a client on day 1 & remove cash from their account. We don’t have to pay for the product until 3 or 4 days later so keep the interest earned for those few days. This made a relatively small firm nearly £2m last year. Unfortunately with rate cuts it’ll be a lost less in
2009
Other income:
Income from the management of customer balances – GBP 8.87m (2007 – GBP 5.69m)
Anyone have any clue as to how that nice little earner works? Is it to do with interest realised on aggregated customer balances?
Corm, that would be my guess, on the following basis:
The line item is addressed in Note 3 to the accounts under the category heading "Other operating income".
There is a separate line item under Note 4 (category heading "Interest receivable and similar income") :
Bank interest receivable – GBP 9.71m (2007 – GBP 6.84m).
Within the accounting policies section it says:
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Other operating income comprises amounts received from the management of customer account balances held in the various stakeholder accounts.
……Cash and liquid resources do not include client funds deposited in a stakeholder account held by The Sporting Exchange (Clients) Limited, a wholly-owned subsidiary of the Group, on the basis that they are held on trust for customers and do not belong to and are not at the disposal of the Group.
================The key I think is in the Trust Deed, where the beneficiaries are not only the users of BF but the BF companies themselves.
Excerpts from the Trust Deed:
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5 Interest and Other AmountsUsers are not entitled to receive any Interest or any Other Amounts. Interest and Other Amounts shall be held by the Trustee for the benefit of the Company and/or the Group Companies in such proportions as are agreed between them and notified to the Trustee from time to time. The Trustee shall be entitled to, and shall, pay Interest and any Other Amounts to the Company and/or Group Companies from time to time.
……7 Company’s Share and Group Company’s Share
7.1 The Company’s Share in the Trust Fund shall be comprised of the aggregate of the following amounts:
(a) any Fees held by the Trustee on behalf of the Company pursuant to clause 6.1;
(b) subject to clause 8, any Interest held on behalf of the Company pursuant to clause 5; and
(c) subject to clause 8, any Other Amounts held on behalf of the Company pursuant to clause 5,
in each case, from time to time comprised in the Trust Fund, but for the avoidance of doubt shall not include the User’s Staked Amounts.
……8 Trust Expenses
The Trustee is entitled to deduct Trust Expenses from Interest and/or Other Amounts unless the Trustee decides to bear and does bear such costs, expenses and charges.
….17 Additional Powers of Trustee
17.1 In addition to all the powers vested in trustees by law or statute the Trustee shall have the following powers and may exercise all or any of the same from time to time in such manner and to such extent as it shall think fit:
(a) power to invest the Trust Fund in any bank certificate, money market account, deposit account or in any other Investment
==============================For the same period to 30 April 2008 the Trustee itself filed dormant company accounts showing itself to receive no income and pay no expenses,
So perhaps Note 4 is interest that goes straight from the bank to the trading side, whereas Note 3 is interest that goes via the Trustee to the trading side – even where the Trustee originally had it also from the bank.
best regards
wit
- Total Posts 17716
Anyone have a link to this report file as I might just need this for my studies.
I work in Financial Services and my firm have a similar, perfectly legitimate, "scam" where we buy a product for a client on day 1 & remove cash from their account. We don’t have to pay for the product until 3 or 4 days later so keep the interest earned for those few days. This made a relatively small firm nearly £2m last year. Unfortunately with rate cuts it’ll be a lost less in
2009Isn’t that essentially what the banks enjoy doing too? I believe it’s known by the euphemism of ‘clearing’
Regarding Betfair’s accounts: 2009’s results will be interesting in comparison, post Premium Charge, so I suggest you archive this thread Cormack
Anyone have a link to this report file as I might just need this for my studies.
Companies House will send you a pdf of the filed accounts for a quid:
http://wck2.companieshouse.gov.uk/7cf41 … ompanyInfo
Betfair’s corporate site has a shorter PR summary with photos, but also a useful 5 year comparison of the headline figures:
http://www.betfaircorporate.com/
best regards
wit
- Total Posts 17716
Anyone have a link to this report file as I might just need this for my studies.
Companies House will send you a pdf of the filed accounts for a quid:
http://wck2.companieshouse.gov.uk/7cf41 … ompanyInfo
Betfair’s corporate site has a shorter PR summary with photos, but also a useful 5 year comparison of the headline figures:
http://www.betfaircorporate.com/
best regards
wit
Thanks so much for that wit, it’s going to be a great help. I have the William Hill annual report at home aswell.
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