Paddy Power plans to return €392 million to shareholders

Bookmaker Paddy Power plans to return €392 million to shareholders this year after earning profits before tax of €167 million in 2014.

The company reported on Tuesday that net revenues rose 18 per cent last year to €881.6 million from €746 million on the back of strong growth in its bookmaker shop and online betting businesses.

Profit before tax was up 21 per cent at a record €166.6 million from €137.4 million. Earnings per share climbed 18 per cent to 297.6 cent from 252 cent.

Its figures show that its customers bet a total of €7 billion with the bookmaker in 2014, an increase of 16 per cent on the €6 billion they staked the previous year.

The Dublin-listed bookmaker is proposing to pay a final dividend of 102 cent a share, bringing the full-year payout to 152 cent, 13 per cent more than in 2013.

In addition, it is planning to return an additional €8 a share, a total of €392 million, to investors from surplus cash and a proposed debt-raising later in the year.

Chief financial officer, Cormac McCarthy, said that the payment will be made through special “B shares”. The company will give further details to shareholders ahead of its anual general meeting in May, where they will be asked to vote on the proposal.

Its net cash at the end of the year was €285 million, €56 million more than on December 31st 2013. Extra taxes in a number of jurisdictions added €14 million in costs during the year.

The group is planning to borrow the equivalent of its earnings before interest, tax and write offs (Ebitda), which was €211.8 million in 2014.

Paddy Power noted that this year has started well. In January and February, online customers bet 18 per cent more the company than during the same period last year, while punters at its retail stores staked 8 per cent more.

Sports results have been broadly in line with expectations. That compares favourably with this time last year when a higher than usual number of favourites were winning.

Recently-appointed chief executive Andy McCue pointed out that the fall in the euro over the opening months of the year has also had a positive impact.

“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,” he said.

Operating profit in its Australian online business grew 68 per cent to €52.4 million, making it the group’s fastest growing performer.

Next best were its UK betting shops, which delivered 50 per cent increase in operating surplus to €21.2 million.

Its Paddy Power online business, saw operating profits rise by 4 per cent to €73.5 million.

The company’s 234 betting shops in the Republic of Ireland added 15 per cent to operating profit to €15.6 million. Mr McCue said that much of the growth stemmed the fact that it opened 20 new shops in the State during the year.

Chairman Nigel Northridge said that the board remains confident of the group's prospects and that shareholders would be updated on progress at its annual general meeting in May.