BETFAIR’S chief executive has given investors a bold defence of his strategy in the face of takeover interest.
Breon Corcoran, who was parachuted in from Paddy Power last summer, said that his turnaround plan had shown early signs of success and that the online betting firm had performed better than analysts had expected.
Betfair rejected an 880p-per-share offer from CVC Capital last month that valued it at £906m, and the private equity firm is expected to return with a higher bid, but Corcoran yesterday attempted to make a case to investors that have seen the company’s value cut in half since its flotation in late 2010.
Since Corcoran was brought in, Betfair has pulled out of markets such as Greece and Germany, which are legal grey areas for betting firms. It has also focused on signing up more customers to its sportsbook business – which operates like a traditional bookie – rather than the peer-to-peer betting exchange it is best known for.
“We have achieved much in the five months since we set out our strategy in December,” Corcoran said. “The business has gone through significant change. A new management team is in place and a wide ranging restructuring has been completed ahead of schedule.
“The strategy is working. We have had early success and shown that the combination of the exchange and sportsbook can deliver a sustainable competitive advantage.”
Betfair said that revenues for the year to May were around £387m – at the top end of guidance and in line with last year despite having withdrawn from some markets.
Shares rose by 0.7 per cent to 851p, and analysts suggested CVC will have to make a much improved bid to win control of Betfair.