Soaring demand for betting via the mobile phone lifts Betfair

Betfair, founded 10 years ago by one-time professional gambler Andrew Black and former JP Morgan trader Edward Wray, said the total value of bets rose 7 per cent in the first half and it expects to make further progress in the second half.

“These results were driven by an excellent exchange performance following a very positive start to the football season and improved monetisation of activity,” said departing chief executive David Yu.

“We expect to make further progress in the second half and remain comfortable with the outlook for the financial year,” he added.

But spending on leisure activities such as gambling will be squeezed, executives noted, as the consumer environment weakens.

“The signs are encouraging but we’re also pragmatic to know that these are really tough times for the consumer...as leisure spend is tightened, so is the size of the wallet for people to spend on sports betting,” Stephen Morana, chief financial officer and incoming interim CEO, said.

Betfair is not a traditional bookmaker but instead acts as an intermediary between gamblers wanting to place a bet or offer odds to others, taking a commission on their winnings.

The group added in a separate statement that it has appointed Stephen Morana as interim chief executive. Chief executive Yu is stepping down at the end of the month with former Paddy Power chief operating officer Breon Corcoran already named as his permanent replacement starting in August.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 36 per cent to £42.4m in the six months to October.

That was ahead of an average forecast of £37.4m based on a poll of 10 analysts supplied by the company.

Analysts at Barclays Capital said this was attributable to cost phasing in the core Betfair business and lower than expected losses in the non-core business, leading full-year forecasts to remain unchanged.

Betfair generated core revenue growth of 12 per cent year-on-year in the second quarter, and this has risen 13 per cent so far in the third quarter due to higher racing revenues. Adverse weather conditions led to race meeting cancellations this time last year making for an easier basis for comparison.