Monday 19 February 2018

Paddy Power blames 'lucky' punters for €10m profit slump

Patrick Kennedy, Chief Executive of Paddy Power
Patrick Kennedy, Chief Executive of Paddy Power
John Mulligan

John Mulligan

Lucky football and racing punters have been blamed by Paddy Power for hitting its profits.

It said that customers had "dream weekends" in January and March, when almost all of the UK's Premier League football teams that are most backed by gamblers won their matches.

"This proved costlier than John Cleese's divorce payments," said the company, which issued financial results for the first half of the year yesterday.

It said that profits in the first six months of 2014 tumbled 14pc to €60.1m, a drop of more than €10m, despite net revenue climbing 7pc to €396.5m.

In the first part of the year, favourites in the Premier League won 64pc of their matches, compared to an average of 53pc between 2010 and 2013.

In June, Paddy Power said that racing punters got in on the act, when a number of results at the Epsom Derby and the Royal Ascot festivals went their way.

Favourites in Irish and UK racing won 37pc of races during the first half of the year, compared to an average of 35pc between 2010 and 2013.

"There has been an extraordinary run of results," said Paddy Power chief financial officer Cormac McCarthy.

"We always say to people that the run of results can go against bookies. Every separate event is a new coin toss."

Paddy Power, whose chief executive is Patrick Kennedy, said that it emerged unscathed from the World Cup after a "dreadful sense of deja vu" as favourites sailed through the qualifying rounds in Brazil.

"From there on in though, results got progressively better, culminating in us hitting the jackpot in the final," the company said.

Germany beat Argentina in extra time having thrashed Brazil 7-1 in the semi-final.

Paddy Power said that its customers laid World Cup bets totalling €198m with it this year - 130pc more than they did in the 2010 World Cup.

The company has also predicted that its Italian business, which it launched in 2012, will take longer than expected to break even and won't do so now until the middle of 2016, following slower than anticipated market growth.

But in better news, it said that its Irish betting shops had fared well over the past six months. Paddy Power has 239 shops in Ireland, having opened 16 shops under its brand during the first six months of 2014.

It said the amount staked by customers over its shop counters here rose 11pc to €548m in the period, while operating profit at the division climbed 13pc to €8.6m.

The company has 299 shops in the UK, with operating profit at those stores jumping 26pc in the first half of this year to €9.5m.

Paddy Power has nearly 2 million active online customers. In Australia, its online operation reported operating profit increased by 57 per cent to €21.8m.

Last month, Paddy Power revealed that it had been the target of a massive data breach, with personal details of more than 649,000 customers having been stolen from its system in 2010.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business