Betfred’s 2021 Profit Decimated by Betting Shop Closures

Betfred Group Limited filed its annual report and consolidated financial statements for the period ended September 26, 2021, to reveal the significant impact of the coronavirus-related closures on its betting shops.

Key Performance Indicators

For the 12 months ended September 26, 2021, Betfred generated £6,999 billion ($8,398 billion) in amounts wagered to register an increase of 8% as compared to the £6,483 billion ($7,779 billion) accounted in the previous comparable period. During the reported period, Betfred operated through Licensed Betting Offices and on the internet.

The amounts wagered generated a turnover of £526 million ($631 million), marginally up from the £525 million ($630 million) the Gambling group accounted for up to September 26, 2020, despite the higher amount of total wagers. The relatively same turnover suggests the operator had less favorable sporting results compared to the previous comparable period.

Gross profit for the period amounted to £412 million ($494 million), marginally up from £410 million ($492 million) in the previous 12-month period, implying that the costs of sales remained relatively unchanged.

EBITDA before exceptional items was £46.5 million ($55.8 million), posting an increase of 31% from £35.3 million ($42.2 million) in the previous comparable period as the decrease in EBITDA from betting shops was more than offset by Betfred’s online operations.

Operating profit for the year was £26.6 million ($31.9 million), nearly four times lower compared to £104.5 million ($125.4 million) in 2020 despite the insignificant operating exceptional credit of £8 million ($9.6 million) as compared to £99 million ($118.8 million) in 2020.

Exceptional items credit in 2021 comprised a net credit of £17.8 million ($21.4 million) related to impairments and provisions, a £7.4 million ($8.9 million) charge related to the provision of a loan to a related party, and a £3.6 million ($4.3 million) in costs incurred from a potential acquisition which did not materialize.

In 2020, exceptional items included a credit of £97.7 million from the HMRC due to excess VAT paid on fixed odds betting terminals (FOBTs) between 2005 and 2013, a net credit of £4.1 million ($4.9 million) related to impairments and provisions, as well as a £2.6 million ($3.1 million) charge from the write off of the third party loan.

Betfred’s profit after tax was a mere £5.3 million ($6.4 million) erasing nearly £160 million ($192 million) from £165 million ($198 million) reported in 2020, revealing the true nature of the impact of closures on its retail betting shops from November 2020 to April 2021.

4% of Betting Shops Discontinued

As of September 26, 2021, Betfred operated 1,470 high-street betting shops, down from 1,529 in the year before as the business is continually reviewing shops incurring losses and closing those which have no perspective of improvement.

During the reported period, Betfred launched operations in Arizona to expand its presence from Pennsylvania, Nevada, Iowa, Louisiana, and Colorado.

On the M&A front, Betfred acquired 70% of the South African sports betting business betting World (Pty) Ltd.