Paddy Power shareholders to get €392m payout from record profits
Paddy Power investors have been dealt a winning hand after the company reported record profits and unveiled plans to dish out over €392m to shareholders.
Shares in the betting firm rocketed about 9pc at one stage, sending them to an all-time high of more than €73 and valuing the company at almost €3.6bn.
Paddy Power, whose chief executive Andy McCue took over the role in January, said its pre-tax profit jumped 21pc to €167m in 2014, as revenue climbed 18pc to €882m.
The company said it had notched up "strong momentum" in all online and retail metrics.
Speaking to investors, Mr McCue said that the company believed it was an "opportune time" to return cash to shareholders "given a confidence in the group's strong cash flow generation, our assessment of our development pipeline and the favourable capital market conditions".
He insisted the decision to hand back cash "does not compromise future growth".
The company is also paying a final dividend of 102 cents per share, bringing the total dividend in respect of 2014 to 152 cent, up 13pc on 2013.
The amount of bets placed by punters with Paddy Power last year rose 16pc to just over €7bn, while 77pc of its €163.8m in operating profit last year was generated online.
Paddy Power said that 55pc of its online revenue originated from mobile devices in 2014.
In contrast to challenges being experienced by rivals such as Ladbrokes, Paddy Power said that operating profit at its Irish retail business jumped 9pc to €15.6m last year.
Paddy Power has 243 shops in Ireland and the amount staked at those outlets topped €1bn last year for the first time ever.
In the UK, its retail generated operating profits of €21.2m, up 13pc in 2013.
It has 332 shops in the UK, and opened 55 there last year. It plans to open 30 there in 2015.
Chief financial officer Cormac McCarthy said that Paddy Power expects to take further retail market share in the UK and Ireland this year. Paddy Power's online business outside Australia generated operating profits of €75.3m, with its online Australian division generating €52.4m.
Paddy Power said its Italian business didn't perform as well as expected.
"Market growth has been disappointing, certainly considerably lower than when we have first entered the market," said Mr McCue of the Italian operation. "We're doing a lot of work on it."