Paddy Power online gambling shines in first half

The rapidly expanding UK online and land gambling group Paddy Power plc posted another successful set of half-yearly results Wednesday, showing that online operations in H1-2013 continued to produce sterling revenues which delivered an impressive three quarters of the company’s profits for the period.

Financial highlights for the six months ended 30 June 2013 included:

* Net revenue up 22 percent in constant currency with revenue growth in every division;

* Profit before tax up 12 percent to Euro 77 million and diluted EPS up 13 percent to 137.1 cent;

* Interim dividend increased by 15 percent to 45 cents per share;

* Net cash of Euro 214 million at 30 June 2013.

Online highlights included:

* Strong online growth with net revenue up 29 percent in constant currency to Euro 243 million and operating profit up 19 percent to Euro 57.5 million (or 28 percent excluding Italy):

* Online (exc Australia): net revenue up 26 percent in constant currency. Operating profit up 17 percent to Euro 42 million (up 29 percent exc Italy);

* Online Australia: net revenue up 33 percent in constant currency, and operating profit up 25 percent to Euro 16.5 million;

* Mobile net revenue up over 100 percent to Euro 104 million and an industry-leading 43 percent of online revenue, with 64 percent of active sportsbook customers and 36 percent of active e-gaming customers transacting via mobile in June. Mobile e-gaming net revenue up 253 percent in constant currency;

* Paddy’s Italian online business continued to progress well with an estimated share in excess of 9 percent of the online sportsbook market (and a close to 20 percent share of the mobile market) for each of the last three months and major expansion of the company’s e-gaming and sportsbook product offers;

* Over 1.7 million Facebook fans and Twitter followers, more than double that of the nearest industry competitor, contributing to marketing efficiency. Further enhancing this position with Paddy Power In-Play!, the first real money sports betting product on Facebook, test launch due in August.

Paddy’s retail highlights showed increased market share and 26 new betting shops opened across Britain and Ireland. Operating profit in the UK was up Euro 300,000 to Euro 7.8 million despite a Euro 900,000 headwind from a new gaming machine tax regime;

Irish Retail stakes were up 2 percent, with operating profit declining by Euro 1.5 milion to Euro 7.6 million.

Commenting on the results, Patrick Kennedy, chief executive, Paddy Power plc, said:

“Paddy Power had a very good first half. Revenues increased in every division with very strong growth of 29 percent in online, which delivered over three quarters of group profit.

“The excellent performance of our Australian business was a particular highlight. Almost two thirds of the Group’s online sportsbook customers now transact with us via mobile and this continues to grow.

“The second half of the year has started very well from a turnover point of view with sportsbook stakes up 25 percent in online and 4 percent in retail on a like-for like basis.

“Despite very poor recent sports results, we are on track to achieve low to mid double digit operating profit growth in constant currency in 2013.”