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LONDON -- Shares in Betfair (LSE: BET ) sprung up 3.5% in early trade this morning, putting on 30 pence to reach 875 pence, following an unaudited trading and strategy update from the world's largest Internet betting exchange.
Estimated revenue of 387 million pounds and underlying EBITDA of 73 million pounds came in at the top end of the company's expectations, while Betfair's cash balance as of April 30 saw a 50 million pound increase to 168 million pounds from 118 million pounds in 2012.
Cost savings increased to around 30 million pounds, up from 20 million pounds in 2012, following companywide restructuring, a new management team coming in and a reduction in the number of staff by around 500.
CEO Breon Corcoran commented:
We have had early success and shown that the combination of the exchange and sportsbook can deliver a sustainable competitive advantage. In the last couple of months, our sportsbook-led acquisition focus has resulted in improved marketing efficiency and a two fold increase in the number of U.K. customer activations. We are confident this will enable us to accelerate revenue growth in our most important market and I believe we can grow in-line with the market in the medium term.
While we are rightly focusing on regulated jurisdictions, primarily the U.K. and Ireland, I firmly believe there is a significant international opportunity. We have recently seen positive regulatory momentum in Italy, Spain and the USA. In addition, revenue from the countries where we have ceased marketing is proving relatively resilient due to the uniqueness of our exchange.
The year also saw Betfair take on a record number of customers, up 108% year on year, since the sportsbook launch, which has benefited the U.K. customer base by an 18% increase year on year in the last six months. The bookmaker also revealed "evidence that the exchange and sportsbook are complementary [as] 24% of football customers are already using both products."
I highlighted Betfair as a "sin stock" to watch back in September last year and, though I haven't taken the plunge yet, if the company continues to churn out good results then it may well pique my interest sooner rather than later.
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