Outlook: Betfair leads the field, but can it keep up the pace?

Outlook Over to a business that works, in the form of Betfair. It looks like a winner. The gambling company jumped to the head of the field by trouncing the City's profit forecasts and handed out sugar lumps to the shareholders in its stable with a chunky dividend hike. The shares duly raced even further ahead of a 950p indicative offer that was withdrawn in May by a major shareholder in cahoots with private equity.

One thing that sideshow did, at least, was to push Breon Corcoran, its chief executive, to put flesh on the bones of his strategy – one that appears to be delivering. If the company kicks on through its second half, Mr Corcoran will be paid the ultimate compliment come Royal Ascot: all his rivals will be bitching about him.

But that won't be easy. He has completed a necessary cost-cutting programme, and the company has pulled out of places which don't really want it around. Nearly 80 per cent of revenues are now derived from markets that won't turn around and boot Betfair out. The problem he faces is that making money in those markets is much harder than in the grey areas where Betfair's earlier bosses were happy to ply their trade. Competition is tougher, margins thinner.

With a traditional sports book operating alongside its person-to-person betting exchange, and with new products that pick from the best bits of both, Betfair is at least building up a head of steam in Britain and Ireland again. It needs this, because the drivers of future growth are very much in the developmental stages. The business under Mr Breon has won its trial. But a bigger race awaits, and winning it will be tougher.