Results woe knocks Paddy Power
Published 28/08/2014 | 10:46
Paddy Power saw profits slump 20% in the first half of the year as football and racing punters took the bookmaker to the cleaners.
The Dublin-based group said pre-tax profits fell to 61.8 million euro in the six months to June 30 because favourites won English Premier League football matches in January and March, while racing punters backed winners at the Epsom Derby and Royal Ascot.
Revenues slipped 7% to 396.5 million euro, compared to a year ago.
But the group, which has 305 shops in the UK, said it had a good World Cup, which saw it add 148,000 online customers and attract 198 million euro in stakes, 130% up on the 2010 tournament.
It also boosted its number of online customers by a quarter to 1.8 million, and saw stakes on its digital platforms rise 22% to 1.4 billion euro.
Paddy Power said football punters had "dream weekends" in January and March when favourite teams in the Premier League won 64% of their games, compared to 53% on average.
Over the half-year favourite horses in Irish and UK aracing won 37% of races, against an average of 35% during 2010 and 2013.
These odds combined to drag the group's win percentage to 9.1% from its long-term average of 10%.
The bookmaker also said it used the World Cup in Brazil to showcase the group with "stunning" results.
It commissioned physicist professor Stephen Hawking to scientifically analyse England's chances of winning the tournament, which generated many national newspaper stories.
A blog written by Manchester United and England footballer Paul Scholes for the bookmaker also generated 255,000 views, a record for the business.
The bookmaker said it opened 33 UK shops during the period, which helped boost the unit's operating profit by 26% to 9.5 million euro.
It added that despite British Government legislation to raise the levy on fixed odds betting machines from 20% to 25% next March it planned to open 40 shops in the UK next year.
The group said it had experienced a strong start to the second half of the year with favourable sports results. It added that online stakes were up 18%, while retail like-for-like sales grew 7%, which lifted group revenue up by 45%.
Paddy Power chief executive Patrick Kennedy said: "The second half has started well with good stakes growth and a rebound in sports results."