Casino deal still on Business
IG brings its spread and CFD brands together
With spread betting now under the briefer banner of simply IG, the company’s figures are struggling to compare with record revenues from August 2011.
BRANDING I
G Group has embraced a new brand identity, bring- ing its financial spread betting and CFD Trading under the same name of IG. Chief executive Tim Howkins explained: “For years IG Group has offered spread betting and CFDs simultaneously under two brands: IG Index and IG Markets respectively. To better reflect that these products are offered by the same group, we have decided to bring both together under one brand, IG.” The move comes as part of a wider development for the IG Group: “This September marked a new milestone in our development. Clients will notice significant improvements to our website and trading platform, including a new, market-leading design. This is part of our on-going commitment to evolve our products and services.”
Meanwhile the company has announced an 18 per cent drop in revenues for the first quarter of the financial year, although this was in line with expec- tations. The comparator period in 2011, which was 30 per cent ahead of the year before, was marked by some extreme levels of volatility in financial markets and short term spikes in client activity. The firm said: “August 2011 remains, by some way, the record month for the group in terms of trading revenue.”
Performance across the group was described as reasonably consistent, with revenue down in all regions. The group attributed this to the ‘particularly quiet financial markets’ impacting all areas of client activity relative to the prior period, including active client numbers, average revenue per client and the number of clients signing up and trading for the first time. It added: “The impact of the fall in revenue on profit before tax was partly mitigated by a number of factors including the flow through into lower staff bonuses, low betting duty and subdued marketing activity; the last of these was both as a direct result of quieter markets and hence reduced demand, and in anticipation of new marketing due to commence early in the second quarter which will build on the strength of the IG brand.”
In the UK and Australian markets, both the number of clients active in the period and the average revenue per client were down, leading to revenue falls of 21 per cent and 17 per cent respectively. However, IG is taking solace in the fact that recent market share data in Australia indicates that IG’s market share actually increased over the prior year from 34 per cent to 37 per cent, in a market which grew by 7 per cent; which it claimed to be ‘particularly pleasing against the backdrop of increased competition and higher competitor marketing’. Revenue in Europe was down by 20 per cent, reflecting the return to more normal seasonal trading patterns, with customers reducing their activity during the summer holiday period. Despite this, active client numbers increased in all of the European countries, with the strongest growth in the group’s newest offices in Sweden and the Netherlands.
The company added: “The Rest of the World was only slightly down against the prior year, with the drop in average revenue per client almost entirely offset by continued growth in active clients. Nadex continues to develop its direct retail offering and saw a steady improvement in the number of clients trading on the exchange, albeit from a low base.”
48 BettingBusinessInteractive • OCTOBER 2012
A very healthy Q1 performance has provided the perfect platform for Betfair CFO Stephen Morana to announce his departure.
EXCHANGE B
etfair’s chief financial officer Stephen Morana, who has been keeping the chief
executive’s chair warm in anticipation of the arrival of new CEO Breon Corcoran, has announced his decision to leave the firm.
Speaking during the betting exchange’s Q1 results, which saw a 13 per cent increase in core revenues, Morana said that he would step down once his replace- ment has been recruited. “It’s been a very difficult decision to make but I feel the time is now right, for both me and the company, to move on. I have been incredibly fortu- nate to have been part of the Betfair success story over the past 10 years and am immensely proud of our achievements. Betfair is entering into a new era under the leadership of Breon Cor- coran and I believe the company has a very bright future ahead of it.”
Chairman Gerald Corbett added: “I would like to for- mally welcome Breon to the company. I’m confident he is going to make a difference and I look forward to working with him to help Betfair realise its potential. In his first few weeks he has been getting to know the business, and our people, and will update the market with his
Betfair greets n with hunt for ne
plans in due course. “We understand why, after ten years, Stephen would like to start thinking about the next stage of his career and hand the reins over to a new CFO. On behalf of the whole company I would like to convey our immense grati- tude to Stephen for the work he has put in to make the busi- ness the success it is today, and in particular, the excel- lent job he did as Interim CEO. Stephen will continue in his current position until we find his successor and we will begin the search process immediately.”
Overall revenue for the quarter increased by 13 per cent to £91.6m, driven by sports performance, with the average revenue per user stable at £188. The number of active customers increased by 13 per cent to 485,000 driven by Euro 2012 and con-
ANALYSIS
Breon Corcoran takes the helm at Betfair with a healthy Q1 performance, but it seems that Q2 will be a little slower. Stephen Morana’s trading update said: “Like- for-like net gaming revenue, adjusting for the impact of regulation, was marginally higher in Q2 to date compared to the same period last year. A slower start to the football season and reduced interest in other sports during the Olympics resulted in slower revenue growth in August. After a strong Q1, this leaves year to date revenues in line with our expectations.” Corocran’s big challenge will be to manage the shareholders after the exchange’s 2010 IPO left some analysts cold and some investors disappointed.
tinued growth in new cus- tomer activations, particu- larly in the UK.
Morana commented: “Revenue growth in the first quarter was primarily driven by Euro 2012, improved mon- etisation of exchange activ- ity, continued mobile growth and a recovery in risk-sports margins. The resulting growth
was partially offset by the impact of regulation. The UK, our largest market, was our strongest performing region, driven by the continued success of the ‘Don’t Settle for Less’ advertising cam- paign and a great summer of sport.”
In football, Euro 2012 was the most important growth
Euro 2012 boosts Fortuna C
EUROPE
entral European book- maker Fortuna Group has reported a 15.2 per cent increase in gross win for the first half of the year to 55.1m euro (£43.8m) on a turnover of 229.1m euro (£182.3m), an increase of 9.6 per cent on 2011. Wilf Walsh, chairman of the Management Board of Fortuna Entertainment Group, commented: “We maintain the double-digit growth in Gross Win and also increased turnover sig- nificantly. Good results in all markets were driven by online betting, especially
WILF WALSH: POLAND ‘HAS BECOME THE FASTEST GROWING MARKET’
during Euro 2012 where we recorded sales growth of 25 per cent on Euro 2008 and delivered a very robust margin of 20 per cent. “Despite the lack of an online gaming offer coupled with a punitive tax regime for legal domestic opera- tors, we still enjoyed great success with our recently launched online business in Poland which has become the fastest growing market in Fortuna’s portfolio.” Indeed, the amounts staked in Poland during the period jumped by 31.1 per cent to 32.9m euro (£26.2m).
The group’s boost in amounts staked was posi- tively influenced by online sport betting growth in the Czech Republic and Poland, by Euro 2012 championship which took place in June 2012 in Poland and Ukraine and by the contribution of the Czech lottery segment. The amount staked from sports betting reached 219.1m euro (£174.3m) in the first six months of 2012, 5.2 per cent more than in the same period in 2011, with the growth highest in the Czech Republic and also in Poland, triggered by the
Rank’s agreement to buy Gala Coral’s casino division for £205m is no longer formally unconditional after its referral to
the Competition Commission took it past the 19 September deadline. In a joint statement, Rank and Gala Coral Group said
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