Paddy Power posts a good half yearly

The UK online and land gambling group Paddy Power plc has posted a positive half yearly covering the six months ended 30 June 2012 and including the following highlights:

* Profit before tax up 21 percent to Euro 68.7 million and diluted EPS up 25 percent to 121.5 cents, despite some adverse sports results since the company’s May trading update;

* Interim dividend increased by 30 percent to 39 cents per share;

* Net revenue growth of 29 percent in constant currency with double-digit growth in every division;

* Four new online ventures with start-up losses of Euro 6.3 million in the period;

* Strong balance sheet with net cash of Euro 186 million.

The online division was again the star of the Paddy Power show with accelerated growth in online scale, new customers and new business investment.

Online customer acquisition was up 50 percent; active customers up 41 percent to 1.2 million; net revenue up 41 percent to Euro 191 million and operating profit up 7 percent to Euro 48.5 million.

Overall, the group showcased strong growth in the period, with customer acquisition up 48 percent; active customers up 42 percent and net revenue up 32 percent in constant currency to Euro 128 million.  Operating profit rose 15 percent before start-up losses on four new ventures;

Australian operations showed good growth, with customer acquisition up 73 percent; online active customers up 37 percent; stakes up 24 percent and net revenue up 42 percent in constant currency.  Operating profit from the region soared 35 percent to Euro 13.2 million.

Mobile operations again turned in a solid performance with net revenues up 239 percent in constant currency to Euro 53 million with 54 percent of active sportsbook customers transacting via mobile in June 2012.

Management reported that a new mobile and tablet led casino product and brand (Roller), a sports betting based social game (BetDash) and a Cayetano-developed gaming product will all start contributing revenue in the second half of 2012.

The company achieved a successful entry into the Italian online market in May, securing a 4 percent share of the online sports betting market in the first full month of operation.

On the retail side, Management reported that UK Retail like-for-like sportsbook stakes rose 12 percent and machine gaming net revenue was up 5 percent in constant currency.  Operating profit rocketed 61 percent to Euro 7.6 million, with 23 shops opening in the year.

Irish Retail operating profit climbed an impressive 79 percent to Euro 9 million, driven by the normalisation of sports results, but like-for-like stakes were down 3 percent.

Chief executive officer Patrick Kennedy said:

“This has been a very strong first half for Paddy Power.  Revenue growth in our existing businesses has accelerated with a 29 percent increase and each of the divisions achieving double digit growth.

“We strongly promoted our brand, products and Money-Back Specials during Euro 2012.  This contributed to a 50 percent increase in online customer acquisition for the half year.

“We’ve also been busy on the development front with sustained investment, a successful launch into the Italian online market and three further new revenue streams set to contribute in the second half of the year.  With our Online and Retail divisions both continuing to deliver substantial growth and our expansion plans progressing, we are confident in the Group’s prospects for the rest of the year and beyond.”

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