Your Business Diary for the week ahead
This week: Odds go against Paddy Power, while Glanbia looks a sure-fire favourite
Sports results generally went against Paddy Power Betfair toward the end of the second quarter, said Davy analyst David Jennings. Photograph: Paddy Power Betfair/PA Wire
Monday August 7th
Results: Horizon Pharmaceuticals, GW Pharmaceuticals, Marriott International, Standard Life, Yamaha Motor Company
Indicators: UK house price index (Jul); German industrial production (Jun)
Tuesday August 8th
Results: Paddy Power Betfair, Avadel Pharmaceuticals, Deutsche Post DHL, Jazz Pharmaceuticals, Ralph Lauren, Time, SIG, Trip Advisor, Walt Disney,
Indicators: Irish consumer confidence (Jul); German exports and imports (Jun); US economic optimism (Aug)
Unlike last year, Paddy Power Betfair and other bookmakers will not have had the European Championships or indeed any other major sporting event on which to attract gambling.
That will have to be factored into first-half results due on Tuesday.
Also, said Davy analyst David Jennings, sports results generally went against the bookies toward the end of the second quarter. For instance, on the last weekend of the Premiership alone, all the favourites won, which, for a bookie, is a bad thing.
“There were some adverse football results at the end of the second quarter and that affects the gross win margin,” Jennings said.
For this reason, Davy’s initial H2 projection of €244 million could be as low as between €225 million and €230 million.
There are also signs of some potential trouble ahead for Paddy Power Betfair in Australia, a major market which is expected to account for 23.5 per cent of ebitda (earnings before interest, taxes, depreciation and amortisation). With regulation and taxation a permanent focus of bookmaker investors, industry talk of a potential tax bump in Australia is jarring.
Currently, about 22 per cent of gaming revenues are paid over to the Australian government in tax and there is talk of a new 15 per cent rate, but whether this is added to the current rate or whether there is a restructuring of the tax regime is not clear.
Wednesday August 9th
Results: Mylan, Acer, Office Depot, Corbion, Ires Reit, Symrise
Indicators: Irish residential property prices (Jun); US business optimism index (Aug)
Meetings: Zamano AGM (Conrad Hotel, Earlsfort Terrace, Dublin 2); The Entrepreneurs Academy’s information morning on Learn to Work for Yourself programme in September (Distillers Building, Smithfield, Dublin 7)
Thursday August 10th
Results: Glanbia, Glencore, Bauer Group, Cineworld Group, JC Penney, Kerry Group, Prudential, News Corp.
Indicators: Irish inflation (Jul); UK construction output (Jun); manufacturing and industrial production (Jun); US PPI (Jul)
Meetings: Lithuanian Professionals Network Ireland’s Autonomous cars, their future, business development and investment opportunity event (Lithuanian Embassy, Ballsbridge, Dublin)
Ahead of its first-half results on Thursday, Davy is forecasting Glanbia group revenue (wholly owned) of €1,561.3 million (up 8.8 per cent year on year) and ebita of €164.92 million (up 4.8 per cent).
Similar to the first quarter, Davy said in a note it expected organic growth (constant currency) to be driven by Glanbia Nutritionals.
For Glanbia Performance Nutrition (GPN) an improving trend is expected in branded like-for-like sales. Full-year guidance calls for pro-forma constant currency EPS growth of 7 to 10 per cent, and Davy said there would be no change likely in full-year guidance.
In the first quarter improved dairy markets enabled Glanbia to report year-on-year pricing growth of 2.1 per cent for its wholly-owned entities.
Pricing growth was augmented by volume growth of 1.7 per cent, Davy noted, to deliver organic sales growth of 3.8 per cent (constant currency). Sales increased by 4.7 per cent on a constant currency basis. Reported revenue increased by 7 per cent.
Friday August 11th
Indicators: German inflation (Jul)
Meetings: Drogheda Chamber summer barbecue