Earnings flat at Paddy Power Betfair but online performance jumps
Gambling giant Paddy Power Betfair has reported earnings of £104m (€118m) in the third quarter of 2018.
Year-on-year this growth in proforma earnings was flat on a constant currency basis.
The group reported revenue of £483m (€550m) for the three months to 30 September, a 12pc increase year-on-year in constant currency, according to a trading update today. This result was helped by the FanDuel acquisition in July 2018, but adversely affected by foreign exchange translation.
The revenue also benefited from the World Cup in July, which contributed £22m in revenue to the quarter.
Paddy Power Betfair saw its online revenue increase 15pc in the third quarter to £248m, as momentum accelerated in both Paddy Power and Betfair.
The group also increased the lower end of its full year earnings outlook by £5m. It now expects to report full year earnings – pre US sports betting – of between £465m and £480m.
In Australia, where gambling stakes jumped by a quarter, revenue declined 2pc due to adverse sports results.
While in the US revenue was up 22pc, with good underlying growth in each of Paddy Power Betfair’s existing businesses supplemented by $5m of sports betting net revenue.
Earlier this year a US Supreme Court ruling struck down a federal law that has restricted sports betting there since 1992. The decision permits individual states to pass their own sports betting laws, and Paddy Power Betfair has since taken steps to expand its presence in the market.
"Overall, we are pleased with the substantial progress we continue to make against our strategic priorities," Peter Jackson, CEO of Paddy Power Betfair, said.
"Together with our scale and strong balance sheet this means we are better positioned to face the significant regulatory and fiscal headwinds that apply next year and to capitalise on the long-term industry growth opportunity."
The group noted the recent increase in betting tax in Ireland, which was announced in last month’s Budget. Paddy Power Betfair said that if these increased rates had applied to its Irish sportsbook stakes and exchange revenues in the 12 months ended 30 June 2018 it would have paid an additional £20m of betting duty.