Bet365 revenue up 9% as operating profit soars towards £400m

Bet365 has reported revenue of £3.7bn ($3.8bn) for the 53 weeks to 31 March 2024, a 9% year-on-year (YOY) increase on the previous reporting period, as operating profit soared to almost £400m.

Revenue rose from £3.4bn in the 52 weeks to March 31 2023, while the operating loss of £24.5m accrued in that period was turned into operating profit of £396.6m.

The privately owned operator noted that despite no major soccer tournament during the period, sports betting revenue jump 11% based on an “additional week of trading activity” and US expansion.

Bet365 noted the percentage by which igaming grew, adding that revenue was “broadly flat” YOY and “in-line” with expectations given the strong performance in the previous reporting period.

Bosses said that maintaining this level of performance was due to a “number of strategic initiatives across the different gaming products.”

Casino growth was said to be “consistent” YoY despite the “number of market headwinds particularly affecting [its] live casino product.”

As per past year, bet365 declined to disclose the group’s geographical revenue spread in its documents filed with Companies House.

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

Within sports betting, bet365 said it had continued to make investment into its trading platform, while bet builder improvements had been made.

In the US, the operator said it had “continued to invest significantly in its American platform.” Last year, post-trading period, bet365 revealed its plans for a Denver, Colorado HQ and the creation of 1,000 jobs.

The business also said it had pumped further resources into expanding its footprint in South America.

In igaming, a new version of the games recommendation engine was launched, while content was delivered via a “quality over quantity strategy.”

Alongside increases in revenue, bet365 also reported a decline in administrative costs of £286.5m YOY driven by a reduction in director remuneration and exchange losses incurred.

However, staff costs rose in line with an increase in total headcount. Bet365 said that as of March 31, 2024 it had 9,145 staff compared to 7,567 in March 2023.

Profit before tax also swung from a £60.2m loss to a £626.6m positive over the reporting period, with the firm also citing rebounding equity markets resulting in increases across asset investments.

Cash assets to hand totalled £3.2bn at the end of March, up from £3bn by the conclusion of the corresponding period in 2023.

The Stoke-on-Trent-based operator also made a £120m charitable contribution to the Denise Coates Foundation, up from £100m in 2023.

CEO Denise Coates saw her base pay slip from £220.7m to £94.7m as total director remuneration declined from £304.8m to £124.2m.

In a reaction note released yesterday, January 6, Regulus Partners said the performance to the end of March 2024 could be a cause of concern for the operator.

The analysts wrote: “Given that global inflation was c. 4% during the period and most online gambling markets managed solid double-digit growth (‘even’ Great Britain produced 7% growth in the comparable period; 4% betting and 8% gaming), it is hard to call these topline results anything more than disappointing, in our view.

“In addition, bet365’s recent relative success in the US is only enough to move the cost base at group level, not the revenue line. In summary, bet365 has run out of in-play growth and has not yet found a similar growth engine for a world in which in-play betting is a relatively mature commodity. Consequently, bet365 is losing market share dangerously rapidly, in our view.

“Significantly, DraftKings generated 85% of bet365’s revenue in the same period and its comparable full-year 25 revenue is likely to be materially bigger. Kaizen Gaming is also catching up fast and is now likely to be number one in Brazil, in our view, knocking bet365 off a long-held top spot as the market regulates.

“Whether a management team famous for its operational effectiveness chooses a different strategy to deliver growth (multi-brand, M&A, etc) or whether the UK’s most successful online family business will remain a cash machine remains to be seen.”