UK betting operator Betfred loss nearly £41m in its most recent fiscal year, with retail writedowns fingered as the corporate culprit.
According to documents filed with Companies House, the privately-held Betfred saw its revenue top £727.6m in the 12 months ending September 30, 2018, a 14.7% improvement over its fiscal 2016-17 result. In percentage terms, the revenue gain was greater that the 9.6% rise the company reported in 2016-17.
Betfred’s 2017-18 overall betting handle rose 6.4% to £13.5b, a slower growth rate than the 17.5% in 2016-17. The company doesn’t break out separate figures for its online and retail operations, but the company credited growth in its online customer ranks for helping to fuel the rise.
However, while gross profit improved 15% to £573m and earnings jumped 43% to £119.4m, the company booked a £41.7m net loss for the year. It’s the second straight year of red ink, and this most recent loss is three times the £13.4m the company reported in 2016-17.
The loss was blamed on nearly £120m in exceptional costs, specifically, “impairments of the retail division following the results of the Triennial review.” In May 2018, the UK government announced that it would slash maximum stakes on fixed-odds betting terminals from £100 to £2 and hike the Remote Gaming Duty from 15% to 21% although the changes didn’t take effect until April 1.
Ironically, Betfred’s 2016-17 revenue gain was credited to the company acquiring 322 retail betting shops from rivals Ladbrokes and Coral before their mega-merger. Following the Triennial Review, Betfred warned that it could close hundreds of its shops, of which there were 1,650 at the end of September 2018.
Regardless of the downturn, the family of Betfred founder Fred Done was issued a dividend of £10.2m, the same sum the company has issued the previous two fiscal years.