Betfair (BET) has announced a £200m special dividend following a bumper first half. Growing customer numbers and favourable sports results drove half-year revenues up by more than a quarter, while underlying free cash flow almost tripled to £67.2m. Little wonder management decided to up the half-year dividend by 50 per cent to 9p - in addition to the one-off £200m bonanza - and pledged to distribute half of earnings in future. In reaction to the news, Betfair's shares rose nearly 7 per cent in early trading.
Even excluding the impact of this year's World Cup and "unusually high" gross win margins, group revenues climbed 12 per cent during the first six months. Coupled with a watchful eye on costs, this boosted cash profit by about a half to £74m. Bosses attributed the growth to a better focus on regulated markets, revenues from which rose 32 per cent.
But Betfair is wary about the incoming Point of Consumption (PoC) tax. The 15 per cent duty came into force on 1 December, and management said incremental costs could reach £18m by the financial year-end. Had the PoC tax been in place all year, that number would be closer to £44m.
Analysts at broker Numis Securities expect pre-tax profit of £93m for the full year, giving EPS of 73p, up from £77m and 61p respectively.
| BETFAIR (BET) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,464p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 1,460-1,468p | 12-MONTH HIGH: | 1,477p | LOW: 932p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 205p* | NET CASH: | £271m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 188 | 31.7 | 25.9 | 6 |
| 2014 | 238 | 67.3 | 55.0 | 9 |
| % change | +26 | +112 | +112 | +50 |
Ex-div: 11 Dec Payment: 16 Jan *Includes intangible assets of £46.1m, or 44p a share | ||||
