Betfred’s Revenue down for 2020 but VAT refund Compensates for It

The United Kingdom retail and online Betfred has released the annual report. It covers the 12 months period that ended on the 27th of September 2020. The report shows lower revenue and wagers. On the other hand, it shows an increase in its profit thanks to the VAT refund. The results have shown that the players have wagered more than £6.48bn at Betfred. That represents a decrease of 35.8% compared to the £10.10bn that players wagered last year.

The Overall Numbers from the Betfred Annual Report

From the total mentioned above, Betfred managed to generate a revenue of £524.9m. It represents a 15.5% decrease, while margins witnessed an improvement. Of that number, the operator has paid £55.1m as betting duty, increasing by 3.3%. It also included £38.1m in machine gaming duty, which is a decrease of 40.8%. As for the statutory betting, it was down 12.5% at %, £8.4m with commission down 31.2% at £13.2m.

The costs mentioned above have left Betfred UK with a gross profit equal to £410.2m, which is less than the £475.0m that it recorded last year. However, that is not all, as the Administrative expenses also suffered a decrease from £447.2m to reach £394.2m.

The Administrative Expenses Released in Betfred’s Report

Out of these expenses, Betfred spent £158.7m on staff costs, which is a decrease from last year’s £187.5m. The UK Gambling operator received a grant from the government of £28.1m through the furlough scheme. It was a scheme introduced to secure jobs when the current health crisis started. The grant’s value was deducted from the total of the staff expense. Speaking of staff members, Betfred’s number of staff employed was 6993, which is a slight decrease from last year’s 7154. In addition, Betfred received £99.2m in exceptional credit during the same period, which is a decrease from last year’s £57.9m. Following other income from operations of £3.1m, the company achieved a total operating profit equal to £104.5m. It is an increase of 39.8% from last year’s £75.8m.

A significant part of the profit was thanks to the exceptional credit that consisted of mainly the VAT credit return of £97.7m. Betfred was able to claim that amount from the HMRC regarding the VAT it paid on the FOBT machines of the group. That was for the period between 2005 and 2013. In that period, the HMRC discovered that many operators overpaid the VAT amount. The investments of Betfred bought a further £94.3m income, which is a slight decrease from last year’s £97.7m. Interest receivable and other income brought another £6.6m, which is much more than Betfred’s previous year of £2.4m.

Conclusion about Betfred’s Report

Following a tax benefit of £403k on other icons, the business managed to accumulate a comprehensive income of that period of £163.2m, which is a 6.3% increase. In March, Betfred announced that the chief executive and founder, Fred Done, will step down. He will no longer be in the lead role for Betfred. That will allow Joanne Whittaker to take his position.

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