Bet365 posts flat full-year revenue at £2.8bn as Covid-19 impact comes to the fore

Bet365 saw its revenue remain flat in its latest set of accounts filed with Companies House as the Covid-19 pandemic had a profound effect on the gambling powerhouse.

For the 52 weeks to 28 March 2021, bet365 reported revenue of £2.79bn compared to the £2.76bn recorded in the reporting period to 29 March 2020, representing a 1% increase.

Bet365 declined to provide a geographical breakdown of revenue, stating it could have a negative impact on the “interests of the group”.

Bet365 said: “A geographical analysis of turnover has not been given as in the opinion of the directors such disclosure would be severely prejudicial to the interests of the group.”

Operating profit rose 21% year-on-year (YoY) from £285.5m to £341.4m, while pre-tax profit leapt 134% YoY from £224.2m to £525.1m.

Total active customers jumped 13% compared to a 4% rise in the 12 months to March 2020, although this was met with a decrease in total amount wagered across sport by 13%.

However, bet365 said this downturn was offset by a YoY sports margin increase. There was a slight decrease in in-play as a contributor to sports NGR, falling from 75% to 68%.

At the end of the financial period, 5,443 staff were employed by the operator, up from the 5,014 employed the last time the accounts were filed.

Bet365 also saw its cash and investment assets rise from £3.3bn to £3.4bn, with the firm noting it was “confident that the balance sheet will continue to strengthen”.

This balance sheet was bolstered by £177m return on the group’s investments portfolio as equity market markets rebounded following Covid-19.

Total group revenue, including bet365’s earnings derived from its ownership of Stoke City FC, remained flat at £2.82bn compared to £2.81bn.

Denise Coates, bet365 CEO, said she was “delighted” with how the operator had risen to the challenges posed by Covid-19 and ensured the protection of both revenue and staff.

She said: “The Covid-19 pandemic has had a significant impact on the business throughout the period. The global suspension of sport across all levels resulted in dramatically reduced revenues.

However, sport resumed in the second half of the period and revenues increased to pre-pandemic levels.

“As a result, revenue from the sports and gaming segment of the group was marginally higher than the previous year.

“I am delighted with how the group responded and adapted to these challenging circumstances. We continued to operate the business successfully throughout multiple lockdowns with business continuity plans enacted to allow staff to work from home.

“I am pleased that no redundancies or reduction in basic pay were made and that the group did not make use of any government support programmes in any jurisdiction,” she added.

The accounts show Coates was paid £250m during the reporting period. She also owns more than 50% of the company’s £97.5m dividend, taking her total renumeration towards just shy of £300m.

Elsewhere, bet365 also upped its charitable donations to the Denise Coates Foundation, rising from £85m in 2020 to £100m in 2021.

Regulus Partners’ Paul Leyland said the latest financials showed bet365 had transitioned from a “disruptive” force in the market and had cemented itself as a mature business model.

He said: “[Bet365’s] scale, brand positioning and operations management capabilities make it an impressive cash machine. However, bet365’s current business model is not necessarily an impressive growth engine or market disruptor any longer.

“It is a sign of generational development in online gambling that bet365 has moved from being a disruptive generator of global market adoption to a relatively mature business model.

“How one of the best and most consistent management teams in the sector responds to this ‘new boring’ may nevertheless be highly disruptive. That said, choosing to find new ways to disrupt for growth or deciding to enjoy the cash flow is a nice problem to have,” he added.