Profits at Paddy Power up 15% last year

Profits at Paddy Power grew 15 per cent to €139.2 million in 2012 after the listed bookie made ground across all its divisions.

Net revenues – the amount it actually won from its customers during the year – grew 31 per cent to €653.8 million, from €499.3 million in 2011.

Paddy Power’s customers bet a total of €5.7 billion with the company last year, a 25 per cent increase on the €4.5 billion they staked in 2011.

The company’s winning margin was 9.4 per cent, meaning its clients lost an average of 9.4 cent from every euro they wagered. The 2011 win margin was 8.8 per cent.

Growth in operating costs, which increased to €418 million from €319 million, matched that in net revenues, leaving the group with operating profits for the year of €136 million, a 14 per cent jump on 2011 when they reached €119.5 million.

Pre-tax profits rose 15 per cent in 2012 to €139.2 million from €121.2 million the previous year.

Five divisions

Net revenue increased across all five divisions, with its Australian on-line subsidiary, Sportsbet, delivering the strongest performance, growing 34 per cent to €156 million. That converted into an operating profit of €30.8 million last year, an increase of 24 per cent on 2011.

Net revenues in Paddy Power on-line increased 27 per cent to €263 million. Operating profit in this division actually fell 9 per cent to €72.7 million. The group attributed this fall to a €20 million loss from development spending, the bulk of this taken up by the launch last year of its Italian business, which cost more than €15 million.

Paddy Power’s on-line division consists of its Irish, British and Italian internet businesses as well as the risk-management services it provides to the French pari-mutual – tote pool – and the British Columbian lottery in Canada.

The group’s traditional bookie shops also performed well. Net revenues from its 213 outlets in the Republic were up 7 per cent at €110 million, and operating profits grew by one third to €14.4 million. It added three shops during the year.

Its 209 UK shops, which are spread through Northern Ireland and Britain, delivered 31 per cent net revenue growth to €101 million. Operating profits in that division were up 29 per cent at €15.3 million. Paddy Power opened 44 new UK shops last year.

Dividend

The group’s earnings per share were up 17 per cent at 248.1 cent from 212.3 cent. The company is proposing to pay shareholders a dividend of 120 cent per share, a 20 per cent increase on 2012.

Commenting on the results, chief executive Patrick Kennedy described 2012 as a strong year.

Company report In numbers

Revenue

€653.8m 2012

€499.3m 2011

Pre-tax profit

€139.2m 2012

€121.2m 2011

EPS

248.1 cent 2012

212.3 cent 2011

Dividend

120 cent 2012

100 cent 2011