bet365 turnover nears £3bn after another successful year
Betting and gaming giant bet365 has again reported significant gains in turnover and profit for its financial year ended March 25th, 2018, with the operator highlighting the performance of the sports vertical in particular.
Total turnover - for a period that did not coincide with any major sporting events - grew 25% year-on-year to £2.86bn. This was driven primarily by growth in sports and gaming turnover to £2.712bn, up 26% from the prior year, with customers wagering £52.56bn over the period, up 12%.
Stoke-based bet365's co-chief executive Denise Coates said the sports offering had been strengthened by a number of enhancements to its product offering during the year. This included the launch of a bet-builder product and the roll-out of early payout functionality for high-profile sporting events.
The operator also expanded the number of live sporting events over the year to around 160,000, with new sports such as eSports added. This helped amounts wagered on sports grow 12% year-on-year, with the number of active customers for the year climbing 4%.
In-play betting was by far the most popular form of wagering, accounting for 77% of sports revenue, while revenue from mobile betting grew 29% to consolidate its position as customers’ favoured channel.
Gaming also grew, supported by significant investment in bet365’s mobile offering, with the launch of new bet365 Games apps for iPhone and iPad. Over the year a total of 332 games were launched, helping improve player retention and increase active customer numbers.
The company made significant investments in advertising during the year, which contributed to a 40% year-on-year increase in direct costs associated with the betting and gaming business to £406.4m.
The staff-related costs also rose, with the number of staff employed by the group climbing to 4,030 by the end of the financial year. Coupled with increased pay for “individuals that have been key to the development of the overarching corporate strategy” of the business, total staff costs were up 32% at £646.8m.
The operator also made significant investments in its responsible gaming and customer protection controls, with the development of its proprietary Early Risk Detection System (EROS) a key focus. Coates noted that bet365 is also investing in projects with external partners, as well as exploring new technologies such as machine learning and artificial intelligence to develop new ways to identify harmful gambling habits.
It also made a £75m donation to the Denise Coates Foundation, the charitable body set up in 2012, which has since donated more than £100m to a range of projects such as improving cancer care in Stoke, supporting Oxfam and relief programmes in countries hit by natural disasters.
This saw total costs for the betting and gaming business rise to £1.63bn, with a further £160.3m in administrative expenses incurred from Stoke City Football Club, which wiped out turnover of £138.6m. As a result total administrative expenses for the year grew to £1.79bn.
The gaming division posted an operating profit of £682.2m for the year, while the football club reported a £21.9m loss. Total operating profit grew 31% to £660.3m.
bet365 saw its annual tax payments increase significantly, rising 78% year-on-year to £78.2m, while the company made a gain of £5.2m from currency conversions. This left the business with a post-tax profit of £587.6m, up 27.8% from its previous financial year.
“Looking forward, the sports, gaming and associated support functions will continue to make sure that they are suitably resourced to manage business growth, deliver innovative product development, provide a high quality customer and safe experience, maintain robust processes that ensure compliance with the requirements of multiple regulatory frameworks and maintain their collective position at the forefront of the industry,” Coates said.
At the end of its financial year, bet365 had cash in the bank of £1.8bn, up 27% year-on-year.
Analysts at Regulus Partners noted: "bet365 has added roughly the equivalent of William Hill’s digital business in one year’s growth and is more than double the size of PPB’s digital business (including Australia) in revenue terms."