Paddy Power Releases Post-close Trading Update

PADDY POWER RELEASES POST-CLOSE TRADING UPDATE

23rd January, 2017 at 08:44:19
Source: http://www.azonlinecasinos.com

Company prevails despite adverse sports and US election results; Trump success cost the group 5 million, whilst punter successes took another 40 million in Q4-2016.

Ahead of its preliminary results on 7 March, on Monday Paddy Power Betfair plc published a post close trading update for the three month period ended 31 December 2016 (Q4 2016) and the year ended 31 December 2016 (FY2016).

The announcement reveals that group revenue in FY2016 was up 18% year on year (+11% in constant currency) to 1,551 million, with management expecting full-year group underlying EBITDA to be around the mid-point of the previously guided range of 390 million to 405 million, despite worse than expected gross win margins in November and December.

Since its Q3-2016 trading update, the gambling group has continued to see good sportsbook staking growth, but results favoured the punters, the statement notes. This started with the unexpected US election outcome, which cost the Paddy Power Betfair almost 5 million, and concluded with group European sportsbooks losing money on football bets in the month of December.

Management estimates that the impact on group revenue from the customer friendly results, before any benefit from the re-cycling of winnings, was approximately 40 million in the quarter. The impact on profitability of these results was partially offset by lower than expected marketing and staff costs.

The group's online gambling operations saw a 3% year-on-year decline in revenue due to adverse sports betting results, despite 15% y-o-y growth in sportsbook stakes. The benefits of the group's geographical diversification strategy were highlighted by a strong performance from Sportsbet in Australia, where Q4 stakes growth of 25% and revenue growth of 18% (both in local currency) helped to partially offset the poor gross win margins in the European business.

Financials Q4-2016

Sports betting stakes 2666 million (Q4-2015 2091 million);

Net revenue percentage 8.1% (Q4-2015 9.4 percent);

Sports betting revenue 299 million (Q4-2015 268 million);

Gaming 89 million (Q4-2015 84 million);

Total revenue 388 million (Q4-2015 351 million).

Financials FY 2016

Sports betting stakes 9890 million (FY2015 7999 million);

Net revenue percentage 8.7% (FY2015 8.8 percent);

Sports revenue 1198 million (FY2015 1009 million);

Gaming revenue 353 million (FY2015 309 million);

Total revenue 1551 million (FY2015 1318 million).

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