Betfair romps home with hike in profits

 
Steve Dinneen
Follow Steve
BETFAIR responded in the best possible way to the news its chief executive is to step down, racing ahead of analyst forecasts to post record full-year results.

The online gaming firm posted pre-tax profits of £26.6m, an increase of almost 50 per cent on the previous year. Revenue grew by eight per cent to £368.6m.

Outgoing chief executive David Yu, who said on Monday he will not renew his contract, said: “Revenue growth during 2011 could have been stronger but we have delivered a significant improvement in margin resulting in profitability for the year above expectations.”

Yu, who sent Betfair shares to a record low of 715p on Friday as speculation of his departure mounted, has been in charge of the firm for six years, after joining a decade ago.

He has overseen a difficult period for Betfair since its stock market flotation last October, with the firm slipping in value by 40 per cent since its flotation for £13 a share.

It has been dogged by regulatory concerns in core markets including Germany and Italy, where it has had its licence suspended. However, it said yesterday it will pay a maiden dividend of 5.9p a share and intends to repurchase up to £50m worth of shares.

The market reacted cautiously to the results, with Betfair stock closing flat at 771.5p. It is now worth in the region of £800m.