Profits at Paddy Power climb 48% to €104m

GROWTH IN its three territories and its betting shop and online divisions boosted quoted bookmaker Paddy Power’s profits by 48 per cent to €104 million last year.

The company published results yesterday showing that the amount wagered by customers in its betting shops, online businesses and over the telephone grew by 34 per cent in 2010 to €3.83 billion.

Of this, the company kept €444 million in winnings, an increase of 45 per cent on 2009, when it won €296 million from its clients.

Pretax profits grew more or less in line with this in 2010, to €104.2 million from €67.2 million. Operating profits were €103.8 million.

Its online business, paddypower.com, accounted for €57.5 million of this, an increase of 20 per cent.

Sportsbet in Australia, which is also internet based, contributed €19.5 million.

Last week, the group bought the outstanding 39 per cent of Sportsbet that it did not own. Yesterday’s results are based on its share of the business as a majority stakeholder.

Its Irish shops added €17.6 million to operating profits, an increase of 8 per cent.

The UK betting shops were responsible for €7.4 million, 3½ more than in 2009.

Its telephone betting businesses delivered €1.8 million operating profits last year. These actually lost €1.2 million in 2009, but growth in this division in the UK helped offset a decline in the Republic.

Earnings per share were up 40 per cent at 168.9 cent from 120.7 cent and the board is proposing to increase dividends by 28 per cent to 75 cent from 58.4 cent.

A breakdown of paddypower. com figures, which excludes the Australian operations, shows that it won €91 million from its internet customers, which was 8.6 per cent of the €1.13 billion that they staked during the year.

Online gaming, that is poker, bingo and various casino games, and its venture with the French state-owned Pari Mutuel (PMU), accounted for €73 million of a total €164 million gross win figure.

Paddy Power does not break out figures for the French business. The bookmaker provides PMU with risk management technology and support under a deal that launched last year.

Chief executive Patrick Kennedy said that proposals by the ousted Fianna Fáil/Greens administration in the Republic to impose a 1 per cent turnover tax on online betting would cost it €5 million in a full year, if the new government went ahead with the plan.

The addition of 31 new shops to its UK retail business, which was 124 at the year’s end, helped this division, but its like-for-like figures show that customers’ bets and the company’s winnings increased.

Gaming machines, which are banned in the Republic, contributed €24.2 million to its overall UK winnings of €54.2 million.

The contributions by the machines was up 66 per cent on 2009.