Saturday 24 June 2017

Paddy Power Betfair may return cash if no international deals done

Breon Corcoran, Paddy Power Betfair
Breon Corcoran, Paddy Power Betfair
John Mulligan

John Mulligan

Paddy Power Betfair will "probably" look to return cash to shareholders if it doesn't pursue acquisitions as it seeks to internationalise its business, according to ceo Breon Corcoran.

Mr Corcoran yesterday cited Denmark, Romania and Bulgaria as examples of countries the gambling giant could be interested in expanding its presence in as it seeks to diversify the geographies in which it operates.

But he insisted that deals wouldn't be done unless they made sense.

"We have an appetite to further internationalise the business to diversify it a bit more, but I don't think there's any strategic necessity," he said.

"We're very happy with our trading positions in the UK, Ireland, Australia and the United States."

He said that the company - formed last year following the €10bn mega-merger between Paddy Power and Betfair - has "considerable firepower" and a healthy balance sheet to make acquisitions.

"There's human and financial capability to do that," he said. "But the right deal has to come along at the right price and if that doesn't, we continue to grow the business and probably in the absence of M&A, return cash to shareholders."

Mr Corcoran was speaking as Paddy Power Betfair unveiled full-year results for 2016.

Proforma revenue at the group rose 18pc to £1.5bn (€1.7bn), while underlying operating profits were 44pc higher at £330m (€380.4m). The results were in line with expectations.

Its Australian business was a standout performer, with revenue at the division rising 18pc in Australian currency terms to £312m. Its underlying operating profit rose 21pc to £84m.

At its Irish retail business, revenue was 2pc higher on a constant currency basis.

But shares in the FTSE-100 company fell more than 5pc at one point as investors fretted about the health of the group's online gaming division.

Total gaming revenue rose 14pc last year to £353m, but the group said that gaming growth slowed in the fourth quarter, primarily because of lower direct gaming activations on its Paddy Power brand and reduced VIP activity across both its Paddy Power and Betfair brands.

"We achieved a lot last year, but if we're self-critical, one of the places where we probably could have been a bit more focused is on the gaming business," said Mr Corcoran. "You can imagine that the gaming business is an important part of the offer, but in some ways is seen as an appendage to the two sport-led businesses. It's not fixed yet. We're continuing to focus on it."

Mr Corcoran said that although Paddy Power Betfair lost £20m last year at the Cheltenham horse racing festival, he expects the group to make a profit from it this year.

Irish Independent

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