Online bets boost Paddy Power
Bookmaker's profits jump 56pc to €103.8m
Published 08/03/2011 | 05:00
Betting group Paddy Power is now generating nearly three- quarters of its profits from internet users and expects the proportion of its profits derived from online services to continue to grow.
Chief executive Patrick Kennedy said yesterday that, excluding operations in Australia, €112m, or 11pc, of its sportsbook stakes last year had been generated from customers using their mobile phones. That's three times as much as in 2009.
Paddy Power yesterday revealed record results, with operating profit rising 56pc to €103.8m last year as the amounts staked by customers across its retail, telephone and internet platforms rose by a combined 39pc to €3.84bn.
A slew of results went in favour of the company, unlike in 2009 when punters fared better. Operating profit was up 34pc in constant currency terms and the results were at the top end of expectations. Davy Stockbrokers said it was maintaining its 'outperform' rating on Paddy Power stock, which closed flat yesterday at €29.50.
The group's gross win percentage climbed from 8.5pc to 9.3pc, while gross profit was 49pc higher at €383.3m. Almost two-thirds of its profits were generated outside Ireland last year.
Mr Kennedy said that the amounts staked at its 207 Irish retail outlets last year fell 4pc to €908.4m, while operating profit at the Irish units rose 8pc to €17.6m. The gross win margin rose, by 3pc to €110m. On a like-for-like basis, bet volumes at stores in Ireland were up 5pc, while the amounts staked were down 7pc.
He noted that the overall number of betting shops in Ireland had fallen by about 12pc to 1,140 from a peak in 2008. Paddy Power's market share of the retail trade here is more than 30pc compared with about 25pc before the downturn.
In the UK, where Paddy Power has 124 shops, the amounts staked were up 2pc on a like-for-like basis and 34pc overall, to €276m. Operating profit at the UK retail operation climbed more than threefold to €7.4m. Paddy Power still accounts for less than 2pc of the retail betting market in the UK.
At its telephone betting arm, the amounts staked fell 3pc to €293m while the unit reported a €1.8m operating profit compared with a €1.2m loss in 2009.
In Australia, Paddy Power's now wholly-owned Sportsbet unit recorded earnings before interest, tax, depreciation and amortisation of A$40m (€29m) last year, up 72pc on 2009.
Mr Kennedy also said that he did not expect any repeal of a 1pc tax on online activities the previous Government introduced in the Finance Bill.