Paddy Power profits hit by "two worst weekends ever" for football results
Two weekends when all the favourites won in the Premier League in January and March have seen Paddy Power profits take a major hit.
Accumulator bets over both weekends came up trumps and ended up costing the Irish bookmaker big bucks.
In an interim management statement covering the period of January 1 to May 11 this year, Paddy Power reported a continuation of the strong growth that led to record turnover last year, although this was dented by a damaging sequence of unfavourable sports results for the start of 2014.
The punter-friendly sports results, already reported for January, came to a head in March, as the statement read: "The adverse results in the period were concentrated in football resulting in our worst two weekends ever for football profitability.
"This contrasts with overall positive sports results in the equivalent period last year, which will unfavourably impact year-on-year first half results."
However, Paddy Power are expecting to offset those results through the course of the financial year, with overall growth reported as strong.
Independent.ie reported yesterday that one Paddy Power punter landed a €577k bonanza when he correctly predicted nine of the 10 Premier League results on Sunday
Meanwhile, Paddy Power chief executive Patrick Kennedy has announced his intention to step down from the role in a year’s time.
"I have always had a personal view that after ten years at the helm, change is good, both for the business and the individual," Kennedy said in a statement.
William Hill, Britain's largest bookmaker, is also looking for a new CEO as the current occupant is to retire by the end of next year.
Paddy Power, used to posting stellar profit growth, said punter-friendly results in March had resulted in its two worst weekends ever for football profitability and would unfavourably affect its first-half results.
Profit growth at the Dublin-based group slowed last year and its shares fell 4.6 percent on Tuesday.
"Given the group's very impressive track record under his (Kennedy's) tenure, this is likely to lead to a period of uncertainty for investors," Davy Stockbrokers said in a note.
For the full year, Paddy Power expects the impact to be largely offset by positive sales growth, the recycling of winnings by customers and the later-than-expected introduction of an Irish online and phone betting tax.
The amount of money staked by customers has risen 15 percent in the year to date and total revenue was 5 percent higher, before a busy period that includes the soccer World Cup in June, when activity traditionally rises significantly.