Betfair's new boss set the betting exchange on a new course today, selling off unwanted businesses and throwing the kitchen sink at the accounts with £81 million in writedowns.
Breon Corcoran, who joined in August from Irish bookmaker Paddy Power, wants to create a "leaner" exchange and is also stripping out an extra £20m in costs. About 100 of the firm's 2,000 staff have lost their jobs to date.
Corcoran said he is "going back to basics" on the exchange, which has more than 430,000 customers betting against each other on an array of events. This means sticking to the core business in the UK, Ireland, Italy and Spain and avoiding countries with uncertain regulatory regimes. It has already announced exits from Greece and Germany.
The chief executive wants to appeal to a broader range of customers by moving away from technical terms such as "back" and "lay", and boosting marketing investment in the UK. He is selling off a majority stake in its struggling financial exchange, LMAX, to a team of management and investors for £2.4m, while its minority stake in social-gaming company Kabam has been sold for £19m.
The firm, floated in October 2010 at 1300p a share, has seen a host of boardroom exits, including that of former chief executive David Yu. The shares today fell 3p to 761p.
Underlying profits fell 22 per cent to £21m in the six months to October 31, but £81m in impairment charges — including write-downs on development costs, LMAX and acquisitions in the US — tipped it £64 million into the red. This year, underlying profits will be £65m-£70m, well down on last year's £85.7m.
But Corcoran insists the core business is in good health and expects to take around £10 million in betting on the BBC's Sports Personality of the Year this weekend. He has his money on US Open champion Andy Murray at 20-1.