How Betfair is profiting from last year's merger2017-05-25 10:06:12
At the time, the company warned of job losses. These were part and parcel of the Paddy Power and Betfair merger and aimed at saving some £50 million in annual cost. A year on, Betfair has gone from strength to strength. In the first quarter of 2017, the combined company made profits of £91 million. That is a 114% increase and holds huge potentials for the Betfair brand.
Are both companies equals?
Let's be honest: at first, it seemed as if Betfair was getting a raw deal here. The merged company was named Paddy Power Betfair as opposed to Betfair Paddy Power, and Betfair shareholders did not get an equal share. Betfair shareholders own 48% of the combined business.
However, the merger created a company with world-class capability. The combined business resulted in shrinking its competition significantly. Today, the company is the largest listed online company worldwide and no British gambling house can keep up with Betfair's high street offers and its online growth.
While the majority of Betfair's positive development can be accredited to the merger, Breon Corcoran, CEO of the combined business, explained that some of the profits are the result of surprising sporting events. "Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth," commented the CEO.