Poll: Can Betfair's growth story continue?
With analysts remaining divided, eGR asks whether the operator can maintain its impressive performance into 2016
Last week Betfair continued its strong momentum with a 21% year-on-year increase in revenues for the 12 months ended 30 April 2015, boosted by a double-digit revenue rise from sports and growth across all areas of the business.
And despite taking a £19.2m hit from the introduction of the UK Point of Consumption taxation regime, Betfair’s profits soared 32% year-on-year with EBITDA of £120.2m.
However, some City analysts threw a spanner in the works, outlining reasons why investors should remain cautious over the firm’s ability to continue its current performance over the long-term.
Analysts at Panmure Gordon lowered their recommendation from buy to hold after raising doubts over the “significant proportion of the growth” driven by the company’s higher risk fixed-odds betting operation.
Meanwhile Ivor Jones at Numis pointed out that while the business appeared to be in rude health, a slowing of numbers during the latter part of the year, coupled with what are likely to be tough comparatives going forward, means the company will struggle to hit the heights of FY15.
And as Betfair looks to reduce its reliance on the UK market in a post-PoC environment, the operator’s chief executive Brean Corcoran also said growth from the firm’s Italian business had been slow and remained somewhat downbeat about the current global regulatory environment.
With this in mind, this week’s eGaming Review poll asks whether Betfair’s growth can continue into 2016 or if analysts are right to be cautious in their predictions. Have your say on the right-hand side of the page.