Betfair Group Plc, which operates a U.K. online person-to-person betting exchange, said it will add more fixed-odds betting products to keep customers from moving to traditional bookmakers.
The company is looking to add more wagers where it acts as bookmaker, to increase the number of in-game or multiple-bet wagers. Betfair’s full-year profit rose 60 percent as it added new customers, the London-based company said in a statement.
Betfair said 92 percent of its sports revenue was generated through its betting exchange, where customers set the odds for each other. On average, Betfair grabs about a 72 percent share of its customers’ gambling money, said Chief Executive Officer David Yu in a conference call with reporters.
“We know they are spending money elsewhere,” he said. “Some customers have multiple accounts, and we want them to spend more with us.”
Betfair was unchanged at 771.5 at the 4:30 p.m. close in London trading, after earlier gaining as much as 3.7 percent. Its shares have dropped 20 percent so far this year, giving it a market value of 825 million pounds ($1.3 billion).
Net income was 24.2 million pounds, or 22 pence per share in the year ended April 30, compared with 15.1 million pounds, or 13.8 pence per share in the same period a year earlier, the company said.
Fixed-odds betting sales are below forecast in the first eight weeks of the new year, while betting-exchange sports, poker and games trading are “in line,” the company said.
“While we do not have an operational issue with Betfair behaving as bookmaker, we do see it challenging its sector premium and ‘killer ap’ status,” wrote Paul Leyland, an analyst with Investec Securities, in a note to investors. He has a “sell” recommendation on Betfair.
The company carries a price-earnings ratio of 34, while traditional bookmaker William Hill Plc’s is 12, according to Bloomberg data.
Customer numbers grew by 15 percent over the year, as new players were attracted by last summer’s World Cup soccer championship. Soccer sales grew 24 percent, the company said.
Betfair said it plans to purchase as much as 50 million pounds in shares over the next 12 months. The company also declared its first final dividend, of 5.9 pence per share.
Yu said June 27 that he will leave the company when his contract expires in October 2012.