Paddy Power 2014 prelims released

Online and land gambling group Paddy Power plc has published its preliminary results for the year to end December 2014, reporting the following highlights:

* Net revenue of Euro 882 million, up 18 percent with strong momentum in all Online and Retail top-line metrics;

* Record profit before tax, up 21 percent to Euro 167 million;

* Diluted EPS up 18 percent to 297.6 cent;

* Dividend growth of 13 percent proposed for full year (152 E-cents per share) and final dividend (102 E-cents per share);

* Additional cash return of Euro 8 per share (Euro 392 million) proposed from surplus cash and planned debt raising.

Online highlights included:

* Strong double digit percentage growth across all top-line metrics with new customer acquisition up 28 percent, actives up 24 percent and net revenue up 19 percent to Euro 553 million. Operating profit increased 21 percent to Euro 126.6 million;

* Online (ex Australia): customer acquisition up 27 percent, active customers up 21 percent, sportsbook stakes up 20 percent and eGaming/B2B revenues up 17 percent. Operating profit growth of 4 percent to Euro 75.3 million, adversely impacted by unfavourable sports results and introduction of UK point of consumption tax in December;

* Online Australia: online customer acquisition up 33 percent, active customers up 38 percent and amounts staked up 22 percent. Operating profit up 68 percent to Euro 52.4 million;

* Mobile net revenue accounted for 55 percent of online revenue, with 77 percent of active sportsbook customers and 45 percent of active eGaming customers transacting via mobile in December;

* Italian net revenue increased by 85 percent or Euro 7.9 million but overall market growth remains slower than expected. The company is undertaking a review of the opportunity which will allow it to position its business better for this market reality.

Retail highlights included:

* UK Retail operating profit up 50 percent to Euro 21.2 million. Like-for-like net revenue up 8 percent. The group now operates 322 shops with 55 shops opened in 2014;

* Irish Retail operating profit up 15 percent to Euro 15.6 million. Like-for-like net revenue up 3 percent. 243 shops in operation, with a record 20 shops opened in 2014.

Andy McCue, Chief Executive, Paddy Power plc said:

“2014 was an excellent year for Paddy Power with robust double digit growth in stakes, revenues and profits, and a marked increase in customer acquisition. We are strongly positioned in the key growth areas of online and mobile, whilst also benefitting from a differentiated and resilient retail presence. Our distinctive brands and deeply rooted marketing capability are core assets.

“As I look ahead, the pace of change in the sector and in the wider consumer environment is intensifying. We continually develop and adapt to anticipate the needs of customers and maintain an edge in the market. Time and again we see that product is the key factor in attracting and retaining customers. We have re-organised the business to significantly sharpen our focus on product differentiation and innovation, and to increase in-house development. This, combined with clear investment priorities, will pave the way for sustained performance and market leadership.

“This year has started well, including a positive impact from recent euro depreciation.”