Betfred records £71.7m post-tax loss in fiscal 2023 as operating costs soar

Betfred has posted a post-tax loss total of £71.7m for the 53 weeks to 1 October 2023, drastically falling short of 2022’s performance which produced £19.6m profit.

The decrease was driven after a huge spike in exceptional costs, rising from £2.2m in 2022 to £60.9m in 2023.

Betfred’s total tax expense for the reporting period was recorded at £35.8m, just under double 2022’s total of £18.2m. The 96% year-on-year (YoY) rise was swayed in part by a three-percentage-point increase in UK corporation tax.

The operator also pointed to new online platform costs, which went live in December 2023, amounting to development costs of £65.4m

In terms of day-to-day performance, the firm did post a 25% YoY increase in turnover for the 12-month period ending 1 October 2023, landing at £908m.

The figure marks a notable rise from the £723.2m recorded turnover the year prior, with the bulk of 2023’s overall figure stemming from Betfred’s retail arm, which amassed £577m, while the online segment generated £331m.

The performance of Betfred’s online arm has improved significantly when compared to 2022’s total turnover of £165.6m.

Betfred’s online operations were supported by its UK heartlands, as well as its 51% in South Africa-facing operator Lottostar.

The Warrington-based operator recorded a steep rise in adjusted EBITDA, with that metric soaring 72% YoY to £117.2m in 2023, a notable rise from 2022’s figure of £67.8m.

The aforementioned acquisition of Lottostar helped contribute £133.9m in revenue, as well as a net profit of £41.4m for the period in question.

Betfred saw its gross profit rise by just shy of 24% YoY in 2023, posting £673m, representing growth from the £543m recorded in 2022.

With that being said, administrative expenses also increased in the same period, which in turn inspired a steep decline in operating profit.

The 53 weeks leading up to 1 October saw that metric fall to £467,000 following a charge to exceptional costs of £60.9m, a significant fall of more than 7,000% YoY up against 2022’s total of £36.8m.

The charge to exceptional costs includes a net charge of £13.8m related to impairments and provisions, a £6.7m charge linked to the write-off of US prepayments and a charge of £337,000 for closure costs of a foreign subsidiary.

A further £95.6m was spent by Betfred on other investments, including £6.5m in the group’s 5.9% holding in Sports Information Services (SIS).

Betfred reiterated that loss-making shops were constantly reviewed and would close if deemed necessary. 

The firm paid out more in 2023 when it came to the statutory betting levy, with the operator paying £12.6m this time around to the Gambling Commission, a slight rise from the year prior which saw £11.3m paid out.

Staff costs were also on the rise, with 8,031 people employed by Betfred in 2023, as opposed to the 7,761 in 2022, which prompted a 13% YoY increase in total payroll costs to £248m last year, rising from £218.8m in 2022.

The firm revealed that Betfred’s highest paid director, who remained unnamed, pocketed £591,000, £31,000 more than 2022’s highest paid salary of £560,000.

The group also increased its charitable donations during the reporting period, up to £926,000 compared to £194,000 in 2022. Fred and Peter Done, who had been Conservative Party donors in the past, did not submit any political donations last year.

Following the conclusion of the reporting period, in June 2024, Betfred sold some of its “third-party managed investment portfolio” and received £60m in proceeds.

The group also took a loan facility of £4.25m from Palsar Capital in January 2024. Palsar is an entity which Fred Done, or his close family, has a “beneficial interest”.