Strong Growth At Paddy Power Plc


28th August, 2014 at 04:28:32

But adverse sports results have an impact on operating profit.

Online and land gambling group Paddy Power plc has released its H1-2014 results for the six months ended 30 June 2014, underlining strong growth but a decline in operating profit following adverse sports results.

Highlights from the report include:

* Strong and accelerated growth with sportsbook stakes up 17 percent;

* Online active customers up 25% and online customer acquisition up 35% compared with growth in the prior six months of 13 percent, 11% and 7% respectively;

* Net revenue growth of 7 percent;

* Operating profit reduction of 14% to Euro 60.1 million, reflecting adverse sports results with a gross impact of Euro 34 million;

* Successful FIFA World Cup with very strong brand exposure - 148,000 new online customers acquired and total group stakes of Euro 198 million (up 130% compared to the 2010 World Cup);

* Diluted EPS down 19% to 110.6 cent, including a 6% headwind from a stronger Euro;

* Interim dividend increased by 11% to 50 Euro cents per share;

* Strong balance sheet with net cash of Euro 244 million as at 30 June 2014 (including customer balances of Euro 69 million).

Online operations again produced good results, and included:

* Record new customer acquisition of 795,000 (up 35 percent), with no increase in marketing costs per new customer.

* Sportsbook amounts staked up 22 percent, and net revenue growth of 5 percent. Operating profit reduction of 18% to Euro 43 million, reflecting adverse sports results;

* Online (ex Australia) sportsbook amounts staked up 22 percent; active customers up 21% and 33% more new customers. sportsbook acquired more customers in the period than in all of 2013. Operating profit decreased 44% to Euro 22 million.

* Online Australia: online amounts staked up 23 percent; active customers up 44% and 51% more new customers. Operating profit increased 57% to Euro 21.8 million.

* Mobile net revenue accounted for 52% of online revenue, with 73% of active sportsbook customers and 43% of active e-gaming customers transacting via mobile in June.

* Good progress in Italy with net revenue up 126% despite sluggish market growth. Online sportsbook market share of 13% in the last two months, making Paddy Power the leading and fastest growing brand.

Retail highlights in the report included:

* Strong topline and profit growth and a record number of new shop openings;

* UK Retail operating profit up 26% to Euro 9.5 million. Like-for-like net revenue up 5 prcent. Estate now 305 shops with 33 units opened in the period;

* Irish Retail operating profit up 13% to Euro 8.6 million. Like-for-like stakes up 5% and net revenue up 2 percent. Estate now 243 shops with a record 16 units opened in the period.

The Group reports a strong start to its third quarter and H2, with revenues soaring 45 percent.

CEO Patrick Kennedy said Thursday:

The punter friendly results in football and racing which impacted the gross win percentage in the initial six months of 2014 failed to put a halt to our gallop with strong underlying performance and accelerating top line momentum delivered in the period.

"For example, we acquired more new sportsbook customers on in these six months than in all of 2013. We had a cracking World Cup which generated stakes of almost Euro 200 million, 130% ahead of the previous tournament. Australia continues to power ahead and Italy has made significant progress.

"The second half has started well with good stakes growth and a rebound in sports results. At this juncture, we expect mid-teen percentage growth in EPS for the full year, despite an Euro 11 million headwind from product fees, new taxes and currency translation.

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