PADDY Power’s gamble on guerrilla marketing tactics around the Euro 2012 football tournament paid off as the Irish bookmaker enjoyed a 21 per cent rise in half-year profits.
The company hit the headlines this summer after Danish striker Nicklas Bendtner
revealed its logo emblazoned on his underpants while celebrating a goal in the tournament.
The bookie said: “The story featured on over 2,000 online news sites and made the ‘lucky pants’ the eighth-biggest news story in the world that day on Twitter. Not even the most money-hungry WAG could have been as delighted as we were to see Bendtner’s jocks.”
Bendtner was subsequently fined and received a one-match ban but that only ensured that the story kept on running.
The bookie took €78 million (£61.9m) in bets on Euro 2012 alone, helping it to make pre-tax profits of €68.7m in the six months to June, up from €56.2m a year earlier.
It said: “Every two years, a major football tournament presents a great opportunity to showcase the Paddy Power offer, which we fully exploited during Euro 2012.”
Other stunts included building a 100ft-high statue of England manager Roy Hodgson in the style of Rio de Janeiro’s Christ the Redeemer, and the group also gave refunds to punters as part of a series of “money-back specials” on events like Chelsea lifting the Champions’ League trophy.
The group paid back €5.6m on four events, and along with the high cost of the PR campaign it said the main benefit to the bottom line will be in years to come.
“This approach pays back strongly over time though, as we benefit from the increased distinction of the Paddy Power brand and the 50 per cent increase in online customer acquisition in the period,” it said.
Growth in online bets lifted internet earnings by 1 per cent in constant currency terms to €48.5m – nearly three quarters of group profits.
Paddy continued to invest in its online business, launching into the Italian online market in May – where it said it had already achieved a 4 per cent share of the online sports
It is also tapping further into demand for smartphone-based betting, with mobile games now accounting for a fifth of total games revenue.
The group’s online offering in Australia was another driver of growth in the half-year, reporting earnings up 24 per cent to €13.2m.
Despite the growth of its mobile and internet ventures, Paddy is continuing to expand its betting shop presence, opening another 20 UK shops in the first half and aiming for up to 40 in the full year.
Like-for-like sales across its 185-strong UK retail estate grew 10 per cent, but the amount left by losing punters rose by a more muted 0.3 per cent to 10.8 per cent as
results went against the bookie.
Ivor Jones, an analyst at Numis, said the rising cost of the firm’s investment in new ventures meant he was not upgrading his current “hold” recommendation.
He said: “In our view, Paddy Power is a great company and we believe that encouraging prospects for growth underpin the share price, but the valuation is rich enough for us and the competition is looking sharp.”
Paddy increased its interim dividend by 30 per cent to 39 cents per share.
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Saturday 25 May 2013
Temperature: 5 C to 17 C
Wind Speed: 13 mph
Wind direction: West
Temperature: 8 C to 17 C
Wind Speed: 14 mph
Wind direction: West