UK bookmakers Betfred swung to a net loss in its most recent fiscal year thanks to the double whammy of new taxes and lucky punters.
For the 52 weeks ending Sept. 27, 2015, the privately-held Betfred says it suffered an operating loss of £76.7m, a far cry from the £31.5m profit in the 78 weeks ending Sept. 28, 2014. Earnings were down nearly half to £56.5m over the same period but up 7.5% on a like-for-like basis.
As with other UK online and retail betting operators, Betfred’s bottom line was done in by the introduction of the online point of consumption tax and the hike in retail Machine Games Duty. Betfred said the combo had trimmed an additional £16.3m off its annual earnings.
All told, Betfred suffered £87.3m worth of exceptional items, including a one-off goodwill impairment from the December 2014 closure of Betfred’s Australian site, which failed to gain traction in the country’s “overpopulated” online betting market.
Despite the bottom line negatives, weekly turnover rose to £200.7m per week from £170m in its previous report. However, unfavorable sports and racing results took their toll on hold percentages, with Betfred.com and Totesport.com suffering “the most significant impact of these challenges.”
Betfred boss Fred Done (pictured) has steadfastly opposed signing up for UK racing’s new Authorized Betting Partner scheme. The company took pains to point out that its contribution to UK racing in the most recent fiscal year was up £500k to £13.3m, well above its £9m commitment. But that may not be enough to keep vengeful racing figures from pursuing an alternative arrangement when Betfred’s Tote monopoly expires in 2018.
Late last month, Betfred agreed to pay a total of £469k in redundancy pay to 88 workers who were let go following last year’s closure of the company’s Wigan call center. The workers, who will receive an average of £5,300 from the settlement, mounted a social media ‘name and shame’ campaign intended to force Betfred to cough up.
In more positive Betfred news, the company just announced a deal that will allow its 1,360 betting shops to air content from all seven Sky Sports channels via the in-house Betfred TV channel. The multi-year deal will take effect this month.