Paddy Power cashes in on England’s not so champion showing

By PERRY GOURLEY
Published on 17/11/2012 00:00

POOR results for English teams in this season’s Champions League have helped bookie Paddy Power fight back from a summer plagued by horse racing cancellations and the distraction of the Olympics.

Its better-than-expected gross win over recent weeks also reflected 19-1 shot Green Moon’s win in this month’s Melbourne Cup.

The Dublin-based group described conditions on the high street as competitive but said it now expects to open 45 shops this year, compared with previous plans for between 35 and 40.

Its 200-strong UK shop estate achieved revenues growth of 5 per cent on a like-for-like basis in the period since 1 July, helped by 12 per cent growth in its sportsbook as more results went in its favour, boosting the gross win.

As well as losing bets on England’s Champions League teams, underdog Norwich’s 1-0 win over Arsenal last month was a big result after accumulators were built up on seven Premier League favourites earlier that day.

The amounts staked by punters was up 9 per cent in Paddy Power shops, although it also reported a 4 per cent drop in revenues from gaming machines.

Across the group, net revenues were 23 per cent higher between July and mid-November.

Trading in Australia was particularly strong and its online operation is also seeing buoyant demand for sports bets.

The improvement came despite the impact of a number of external factors, such as weather-related horse racing cancellations and the Olympics.

The company’s half-year profits rose 21 per cent in August after PR stunts during Euro 2012 helped it to take €78 million euros (£62m) in bets.

Its 100ft high statue modelled on Rio de Janeiro’s Christ the Redeemer with England manager Roy Hodgson’s face and giant working “vuvutruck” in response to Uefa’s banning of vuvuzelas helped it to exploit the tournament.

The company also said its Irish retail business “performed positively” seeing like-for-like stakes up 0.4 per cent and net revenues up 8 per cent.

Paddy Power, which has increased its presence in Britain as well as Canada and France in recent years, did not give details of its performance in the Italian market it entered this year

James Ainley, analyst at Citi, said a strong performance in Australia had offset a slightly disappointing performance in the European business.

Davy Stockbrokers said in a note that higher-than-expected revenue growth of 34 per cent in Australia made up for slightly weaker-than-expected revenues online.

The brokerage has retained its full-year forecast for 18 per cent growth in earnings per share.

Shares in Paddy Power rose by €0.20 to €54.50. The shares have risen by more than 27 per cent over the past year.