Bet365's revenue ticked slighty up in 2021-22 as gaming growth offset a sports betting decline, but increased customer acquisition costs in new markets led to an almost 90% drop in profit.
Bet365 reported that revenue from sports and gaming for the year ended 27 March 2022 was up by 2.9% year-on-year to 2.85 bn pounds sterling.
The increase was mostly due to the success of its gaming operations. Sports gaming revenue was down by 2% from 2020-21, while gaming revenue was up by 25%.
This would suggest sports betting revenue for 2021-22 of around 2.30 bn pounds sterling, while gaming revenue would fall around 546m sterling pounds.
Regulus Partners noted that Bet365's margings in 2020-21 were "unusually high" and that in 2021-22 they came back to more typical levels. It said that on an underlying basis, its sports betting performance achieved growth of around 15-20%.
"To a large extent, Bet365's underlying performance is far stronger than 2% revenue growth suggests, especially as evidenced by a nearly 50% increase in global active users", Regulus said.
"In part, the anaemic revenue performance is due to unusually high sports betting margins during the comparable period, caused by lockdown and major events disruption as governments reacted to Covid-19, which implied a circa 15% revenue headwind. We believe a circa 20% swing in sports betting revenue can be explained by margins and bonusing, suggesting a healthy underlying sports betting growth rate of 15-20% across the business".
Direct costs for sports and gaming grew more slowly than revenue, by 1.4% to 496.8m sterling pounds, leaving a gross profit of 2.30bn sterling pounds for Bet365, up 2.7% from 2020-21.
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