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Power races ahead for year-end float

BOOKMAKER Paddy Power is set to make its stock market debut before the year-end with an £18m share placing in a move which will see the company valued at over £92m.

Paddy Power management today embark on a week-long roadshow taking in potential investors in Ireland, Scotland and England for an issue which represents a first public offering by an Irish bookmaker.

The flotation will see Stewart Kenny's share in the business valued at £9.2m, while chairman John Corcoran will have a stake worth over £18m.

Other leading shareholders include the on-course bookmaker David Power with a 15pc stake which will be worth almost £14m post flotation.

Corporate shareholders include state owned ICC Bank, which holds a 16pc stake valued at £14.75m, and Mercury Private Equity with a 10pc share worth £9.2m.

Power chief Stewart Kenny said the aim of the placing was to raise capital for the continued expansion of the group, particularly its interactive online betting operation in the UK.

He said the failure of Hills to float on the stock market earlier this year the group pulled out of a proposed float for the second time in as many years was no cause for concern.

"We have 12 years of strong growth behind us, and believe there is a strong appetite for our shares," he said yesterday.

With a 30pc market share and 121 betting shops, Power is the largest bookmaker in Ireland. It is also a leading telephone betting operator, and launched an online betting service in June this year.

In the year to December last, the group made a pre-tax profit of £7m on a turnover of £270m. Net assets are currently estimated at £19m. The 1999 profit compares to a pre-tax figure of £5.56m in 1998 and one of £4.47m in 1997.

The group achieved strong profit growth in the first half of the current year, with turnover reaching £174m. This puts the group on course to more than double turnover in the space of three years turnover for the whole of 1997 was just £156m.

Pre-tax profits in the first six months of this year were £5.67m equivalent to the entire year's profit in 1998. The group has almost 19,000 telephone betting customers, while the numbers using the paddypower.com site have grown from 2,666 in June this year to 5,887 in October.

The group said it was aware that some consolidation can be expected in the sector.

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