Betting
Enlarged Betfred should achieve 6.5bn turnover
As part of its acquisition of the Tote, Betfred has offered to dispose of 25 shops where local competition has been compromised by the deal.
INTEGRATION B
etfred has offered to sell shops in 25 loca- tions in an attempt to halt
the referral of its bid to buy the Tote to the Monopolies and Mergers Commission by the Office of Fair Trading. OFT senior director Ali Nikpay said: “Betfred’s acquisition of the Tote did not raise competition con- cerns at a national level. However, there are some local areas where it has resulted in the elimination of or a significant reduction in choice of betting shops for consumers. The OFT is now considering Betfred’s offer to divest one of its betting shops in each area to remove the OFT’s competi- tion concerns.”
The OFT has suspended a referral to give Betfred time to dispose of the shops and the company will have to have identified buyers for the units before the OFT will agree not to refer. Betfred’s parent company Lightcatch Ltd has filed accounts for the year to the end of March 2011, the last set of annual accounts before the bid for the Tote. Turnover increased by 17 per cent to £4.1bn while pre-
tax profits were £13.8m, compared to just £90,000 the previous year. Gross profits rose by 13.6 per cent to £21m, while operating profit before exceptionals was £25m, up from £12m.
Those results were achieved with an estate of 846 shops, after the company had opened 14 new shops over the year and the Tote deal later added another 517 shops. However, as Betfred will be disposing of 25 shops, the merged estate will number 1,338 shops.
The last accounts avail- able for the Tote show turnover from its 541 shops was £2.25bn. The Tote did not publish segmental profit figures, however, so it is not possible to compare shop profitability with other oper- ators. It did disclose, though, that its FOBTs con- tributed an average £680 profit per week.
Betfred acknowledged the contribution of machines to its business: “The group has continued to receive benefit from the operation of fixed odds betting terminals at its betting shops,” and it is expected that increased scale that the Tote deal
BETFRED HAS OFFERED TO SELL 25 SHOPS
DIRK VENNIX AND GRAHAME MORRIS
BETTINGBRIEFS
BETNET TO BE BOUGHT
France Pari is set to acquire troubled French sportsbetting site
BetNet.fr, which had been declared bankrupt after only a year in operation.
BetNet.fr has been a victim of the restrictive French betting laws which despite being ‘deregulated’ still offer incumbent operator PMU great advantages over the competition, such as the ability to advertise at French racecourses. BetNet had hoped to secure 5 per cent of the French online betting market, but only attracted 1.5 per cent. France Pari is making a big push in competing with the PMU in launch- ing a horseracing pari mutuel product after teaming up with Zeturf.
25 PER CENT REVENUES INCREASE
ANALYSIS
The new enlarged Betfred will no doubt be an even more serious player in the UK retail market and should be able to grow its estate even further, both organically and through acquisition. The enlarged company should be able to achieve turnover in excess of £6.5bn and operating profits of around £40m, once integration is complete. The biggest problem the firm now has is in getting buyers for the 25 LBOs to avoid being referred to the Monopolies and Mergers Commission. Considering the buyer will immediately become a competitor to a Betfred shop, the bookmaker has to finely balance the sale price with the quality of the long term opposition.
creates could increase machine profitability as well.
Betfred reported that inte- gration was underway: “This much-publicised transaction has led to considerable inte- gration activities and inter- nal restructuring such that the enlarged Betfred group can maximise the return on its investment.” And it also reported that it has tidied up its balance sheet; reducing debt by £28m to £19.8m by way of a loan from directors.
Meanwhile, Betfred has signed an unusual partner- ship deal with online sports goods retail Kitbag to become its exclusive betting partner. The partnership will offer members of both sites exclusive introductory deals and promotions including free bets and discounts on sports merchandise and equipment at
Kitbag.com. With an extensive product range of exclusive and offi- cial sporting merchandise and memorabilia,
Kitbag.com will also provide Betfred with prizes for cam- paigns and promotions. Rakesh Chablani, com- mercial director of
Betfred.com, said: “The part- nership between Betfred and Kitbag will offer users of both websites access to exclusive promotions and offers, further enhancing the user experience across the board. With free bets and top quality prizes to be won, the part- nership is great news for sports fans.”
Walsh takes the reins at Fortuna F
EUROPE
ormer Coral managing director Wilf Walsh has become interim CEO at
European bookmaker Fortuna Entertainment Group. Walsh, already vice chairman of the Manage- ment Board at Fortuna, has replace Ji í Bunda who has decided to leave the company.
Bunda explained: “I want to thank all employees of Fortuna, our partners and also our shareholder. We are about to post record-break- ing financial results for this year so I am leaving with a satisfaction. I will still remain the shareholder of the
WILF WALSH: NEW INTERIM CEO AT FORTUNA
company as I support Fortuna and believe in it.” Jozef Janov, chairman of the Fortuna Supervisory Board, commented: “After
18 BettingBusinessInteractive • JANUARY 2012
joining Fortuna in 2009, Ji í had three key tasks ahead of him - to prepare the firm for the IPO in the Warsaw and Prague Stock Exchanges, to launch the lottery project of Fortuna and to increase the company’s profitability. Under his leadership the company successfully achieved all goals. There- fore, on behalf of sharehold- ers I would like to thank him deeply for his work.” Walsh has retained links at Gala Coral, where he is a non executive director. He is a strategic betting advisor of British horseracing through his non-executive director
role at Racing for Change, a partner in Predict - a private equity consultancy focused on the leisure sector - and an operating partner at Global Leisure Partners. Walsh has been vice chair- man of the Management Board responsible for cor- porate strategy and partici- pated in Fortuna’s listing on the Prague and Warsaw stock exchanges in 2010. He will be in the interim CEO position at least until the annual shareholders meeting planned for May 2012.
Janov said: “Wilf guaran- tees continuity and a further
positive development of Fortuna. I am convinced that the company will benefit from his greater involvement in day-to-day business of Fortuna and his broad expe- riences with different Euro- pean markets.” According to Walsh, the priority for the company in the near future will be a further strengthening of Fortuna’s position in the current markets. “The per- mission of online betting in Poland is a unique opportu- nity for us as well as inten- sive development of the lottery business in the Czech market.”
Financial spread betting firm IG Group Holdings has said it expects to report revenue of £195.6m, an increase of 25 per cent, for the six months ended 30 Novem- ber 2011. Excluding the group’s sports business, which was closed during the period, the group achieved like-for-like revenue growth of 28 per cent. The firm said that this strong growth in the group’s financial busi- ness was driven by a 15 per cent increase in active clients and an 11 per cent increase in revenue per client. The group’s underlying per- formance was again driven by continued growth in the UK.
£1M TOTESCOOP6 BONUS WINNER
A punter has won £1,030,905 after landing the totescoop6 bonus fund last month. Four tickets qualified for the bonus race after picking six winners previously but only one of them chose Quantitativeeasing to win the Spinal Research The Atlantic 4 Gold Cup at Cheltenham. When added to the quarter share of the origi- nal totescoop6 jackpot, the bonus victory took the total winnings to £1,307,525. Fred Done, chairman of Tote owner Betfred, said: “The totescoop6 has created yet another millionaire after one lucky punter landed the bonus fund at Cheltenham this weekend, but he’ll owe Barry Geraghty a big drink after his heroics on Quantitativeeasing.”
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