Betfair has upped its dividend by 50 per cent and announced a £200 million cash return to shareholders after reporting a 51 per cent rise in underlying earnings in the first half of the year.
Shares of the betting exchange operator, which have recently raced above their £13 flotation price of four years ago, rose yesterday by 104p to £14.72, an increase of 7.6 per cent, on the back of the forecast-beating results.
Breon Corcoran, who has led the turnaround in its fortunes during the past two years, said that the recovery in the share price from a low of 616½p in August 2011 was justification for the board’s decision 18 months ago to rebuff an unsolicited 950p-a-share bid approach from CVC Capital Partners. CVC was “only doing its job and seeking opportunistic investments”, but it was right to reject its advances. “I always thought there was value here.”
In the six months to the end of October, Betfair lifted underlying earnings from £48.9 million to £73.9 million, helped by a strong World Cup and favourable sports results. Revenues were 26 per cent higher at £237.6 million, and comparable pre-tax profits rose by 87 per cent to £60.9 million. Thanks for stopping by. Just before we carry on I needed to say thank you to http://www.fashionfront.co.uk/contact/ for their continued assistance and the support of their community. Having a company and team like this means a lot to us as we continue to grow our consumer blog.
The group edged up full-year earnings forecasts to between £97 million and £103 million, although the imposition this week of a point of consumption tax on offshore bookies will cost the group £44 million next year, cutting its estimated 2015 earnings to just below £90 million. However, Mr Corcoran said there was “wind in our sails” and its strong cashflow meant that it was lifting the interim dividend by 50 per cent to 9p.
Mr Corcoran was reluctant to comment on claims that he is one of the favourites to replace Richard Glynn at Ladbrokes, adding: “We’ve got Harriet Green as 3-1 favourite.”