World Cup takings boosted profits for Paddy Power

WINNINGS OF more than €11 million from World Cup betting and contributions from the Australian businesses it bought last year boosted bookmaker Paddy Power’s first-half profits by 50 per cent to €52.5 million.

The listed bookmaker said yesterday it won €205.6 million from its customers in the first six months of the year, an increase of 55 per cent on the €132.7 million it won during the same period in 2009.

The figure included €11.7 million won during the World Cup up to the end of June. The company’s clients lost €18 million during the competition, which ended in July.

It also included a first-time contribution of €41.8 million from its Australian online operations, Sportsbet and IAS. Stripping out this, the company’s total income was up almost 25 per cent at €164 million.

Operating profits grew 48 per cent to €49.5 million from €33.5 million. Australia’s contribution at this level was €7.9 million. Excluding this figure, Paddy Power’s operating surplus was 25 per cent ahead of the 2009 first half at €41.6 million.

Financial income of €3 million lifted profit before tax for the first half of the year by 50 per cent to €52.5 million from €34 million in 2009.

Earnings per share were up one-third at 82.2 cent. The company is proposing to pay an interim dividend to shareholders of 25 cent, 28 per cent more than 12 months ago.

In addition to the increased dividend, chief executive Patrick Kennedy said the company could now pursue other opportunities, including buying out the minority stakes that it does not own in the two Australian companies.

Their results triggered the earn-out clause in last year’s agreement for Paddy Power’s existing 60 per cent stake, and the Irish company paid the minority shareholders €7 million due under the deal earlier this year.

The non-Australian online business delivered 28 per cent growth in operating profits to €29 million from €22 million. Winnings increased 42 per cent to €75 million from €51.6 million.

Paddy Power had 476,000 active online customers at the end of June, 41 per cent ahead of the same time last year, when it had 337,000 clients. Including Australia, it had almost 600,000 internet customers at the end of June.

Its Irish betting shops were the only element of its business that did not grow in the first half. Winnings from punters were down 2 per cent at €55.5 million from €56.6 million. Operating profits were down 23 per cent at €9 million from €11.7 million.

The company added eight shops in the 12 months to the end of June, bringing the total to 203. Mr Kennedy blamed good results for punters at this year’s Aintree and Royal Ascot racing festivals for the fall in profitability. By contrast, winnings in its UK shops were €24 million, 38 per cent more than at the half-year stage in 2009, and operating profit in that division was €3 million, compared with €500,000 12 months ago.