Tuesday 23 October 2018

Paddy Power Betfair’s earnings to be hit by extra taxes in Australia

The takeover of a fantasy sports business will also hit the betting group.

Paddy Power Betfair has been knocked by extra taxes in Australia (Paddy Power Betfair/PA)
Paddy Power Betfair has been knocked by extra taxes in Australia (Paddy Power Betfair/PA)

By Helen Cahill, Press Association City Reporter

Paddy Power Betfair has lifted sales and profits, but warned investors that its full-year earnings would be knocked by extra taxes in Australia and losses from its fantasy sports business.

The betting group trimmed its earnings before interest, tax, depreciation and amortisation guidance, saying the figure would come in between £460 million and £480 million this year.

Paddy Power Betfair has reported a 5% increase in revenues for the six months ended June 30, up from £827 million to £867 million.

Profit before tax at the betting group was up 4% year on year to £106 million.

Chief executive Peter Jackson said: “It has been a busy and successful few months for Paddy Power Betfair.

“We have made substantial progress against our strategic priorities and trading in the second quarter was good, with all brands and operating divisions contributing to the group’s double-digit revenue growth.”

The figures come after the FTSE 100 company announced plans to merge its US business with fantasy sports firm FanDuel.

However, the inclusion of FanDuel’s operations is expected to knock earnings this year, the firm has said.

In addition, the company took an £8 million hit from changes to betting taxes implemented in Australia last year.

In the UK, bookies have also been warning about the impact of a recent Government move to slash stakes on fixed-odds betting terminals.

William Hill, which makes more than half of its retail revenues from FOBTs, said in May that the “unprecedented” decision could see around 900 of its betting shops become loss-making.

Ed Monk, at Fidelity Personal Investing, said: “Paddy Power Betfair stands to gain from the opening up of US betting markets, confirmed earlier this year, and has moved quickly to expand its FanDuel site to capitalise.

“That benefit, though, now appears to be priced in to the shares and investors will want to see improved operational performance and a return to growing market share from here.”

Press Association

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