Sell-offs and writedowns as Betfair gets back to basics
Thursday 13 December 2012
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.
- 1 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 2 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 3 Top 10 travel destinations for 2015: From Haiti and Alaska to Namibia and Iceland
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
UK weather: Travel chaos continues as King's Cross train delays add to snow on roads
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...