Business

Betfair shares fall 16% as cold weather hits racing

 

Shares in betting exchange Betfair have closed down 16% after it said the recent cold weather had disrupted race meetings, hindering its business.

The comments came with the company's maiden results as a public company.

They showed underlying profit before tax 49% higher for the six months to October than for the same period last year at £16.9m.

After taking account of the costs of its recent flotation, pre-tax profits were down 18.9% at £7.4m.

The company said that cancelled race meetings in the current quarter would hold back growth - although it was still confident its full-year results would meet expectations.

Despite this, by mid afternoon on Tuesday the shares had fallen 14%, and they now stand 34% below their October flotation price.

The company, which acts as a betting exchange by matching individual betters to each other, also said betting on the 2010 football World Cup had boosted revenues.

It added that its active customer numbers had grown by 31% and it now had 654,000 users.

'Stronger trend'

Betfair said that while it had experience a "strong performance" in the first quarter of its financial year, thanks to the World Cup, in the second quarter trading conditions had been more "challenging", particularly in horse racing and poker.

"Trading in the third quarter began on a stronger overall trend than the second quarter in sports, again led by football," said Betfair's chief executive David Yu in a statement.

He went on to say that: "Recent weather conditions in the UK and Ireland, however, caused a number of race meeting cancellations, moderating overall growth rates in the quarter to date."

Betfair was founded 10 years ago, and says it is the world's largest business of its kind.

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