Paddy Power raises full year earnings forecast

Paddy Power this morning raised its forecast for full-year earnings growth, driven by a 38 per cent rise in sales and strong growth in its online division.

“The board now expects mid to high teens percentage growth in earnings per share for the full year,”Paddy Power said.

In an interim management statement for the period July 1st to November 16th 2014, the Irish bookmaker noted that the group has been benefiting from good top-line growth and favourable sports results. Sportsbook stakes were up 18 per cent online and 3 per cent in retail on a like-for-like basis, with total group net revenue up 38 per cent.

Online revenue grew strongly, up by 42 per cent, comprising a 49 per cent increase in sportsbook and 20 per cent growth in egaming/B2B. Online stakes grew by 18 per cent; 21 per cent in Australia and 16 per cent in online ex Australia.

“We lead the industry on penetration of the key mobile sector, with 58 per cent of our total online revenue from mobile devices in the period,” Paddy Power said.

The group's UK and Irish online business, paddypower.com, grew its sportsbook net revenue by 59 per cent, benefitting from the largest year-on-year gross win percentage rebound amongst our divisions. eGaming/B2B revenue grew by 19 per cent, and total active customers increased 33 per cent with customer acquisition up 23 per cent, boosted by the World Cup. The group's Italian online business, paddypower.it, grew its net revenue by 72 per cent in the period.

In the group’s retail business, revenue grew by 14 per cent on a like-for-like basis, with the group opening 73 shops in the year to date, 53 in the UK and 20 in Ireland, bringing total outlets up to 562 units.

“Including new shops, sportsbook stakes increased by 15 per cent and total net revenue by 31 per cent,” Paddy Power said.

The group’s Irish division reported a 4 per cent hike in amounts staked, with net revenue rising by 11 per cent. Paddy Power has opened 20 new shops in Ireland this year, 17 of which it acquired.

In UK retail, on a like-for-like basis, sportsbook stakes grew by 2 per cent, sportsbook net revenue by 20 per cent and machine gaming revenues were up 12 per cent.

The group had no debt and cash of € 279 million, or €206 million excluding customer balances, on November 16th.

In September, Paddy Power, together with other betting operators in the UK, formed the Senet Group, a cross industry body to promote responsible gambling standards, headed by an independent standards commissioner. Paddy Power said that the group has already taken steps to respond to public concerns on advertising, including restricting sign up offers on pre-watershed sports betting TV advertising, and will launch a major responsible gambling advertising campaign in January. Paddy Power is also awaiting the publication in December of the Responsible Gambling Trust's research into machine gaming in the UK.