Betfred Reports Significant Loss Despite Revenue Growth in Challenging Fiscal Year
Betfred, a longstanding figure in the UK gambling market, experienced a turbulent fiscal year ending on October 1, 2023. The company reported a pre-tax loss of £71.7 million ($91.7 million), a stark contrast to the previous year’s profit of £19.6 million ($25.1 million). This loss came despite a substantial 25.6% increase in turnover, reaching approximately £908 million ($1.2 billion).
Revenue Growth and Internet Performance
The company’s revenue dynamics revealed a strong performance, primarily driven by a 99% surge in internet revenue. Online revenue soared from £165.5 million ($211.7 million) to £331 million ($423.4 million). In comparison, retail turnover saw a modest increase, rising from £557.6 million ($713.2 million) to about £577 million ($738 million).
Factors Contributing to the Loss
The significant pre-tax loss was largely due to exceptional costs totaling £60.9 million ($77.9 million). This included a £40 million ($51.2 million) expense for onerous contracts and substantial write-downs related to US prepayments exceeding £6 million ($7.7 million).
Strategic decisions, such as exiting the Maryland sports betting market and divesting part of its investment portfolio for over £60 million ($76.7 million), also impacted the financial results.
Strategic Investments and Expansion
Despite financial setbacks, Betfred demonstrated robust financial management by opting not to provide dividend payments to the Done family this year. The company continued its ambitious expansion strategy, investing over £100 million ($127.9 million) to acquire Sharp Gaming, a new technology business aimed at enhancing customer migration.
Betfred also expanded its US operations, opening new retail locations in Nevada, Ohio, and Colorado, and increased its ownership of the South African online gaming company LottoStar to 51%.
Company Background and Future Outlook
Founded in 1967 by Fred and Peter Done as a single store in Salford, Betfred has grown into a major player in the gambling industry with 1,387 licensed betting locations and over 8,000 employees. Fred Done, now chairman after stepping down as CEO, emphasized the company’s commitment to growth despite challenges in the competitive gambling market.
Betfred’s recent fiscal year underscores the complexities and risks inherent in the gambling industry. The company’s significant loss, driven by exceptional costs and strategic market exits, contrasts with its notable revenue growth, particularly in online operations.
