Premier League draws a boost to bookies

AN 18% increase in the amount of Premier League football matches which have ended in a draw, from early October to the end of last week, are expected to offset recent damage to bookmakers’ earnings made by punters’ success on the horses.

“We believe that the favourable football results will more than offset the slightly disappointing horse racing data. We expect the gross win margins of William Hill, Ladbrokes and Paddy Power to come in at the upper end of expectations for the fourth quarter of 2009. Second-half earnings of all three will likely have benefited from this trend,” Davy Stockbrokers said, yesterday, in a detailed research note on the sector.

Davy’s note reasoned further: “The percentage of Premier League games drawn has risen from just 6% at the time of Ladbrokes profit warning on October 8 to 24% as of the end of the year. This implies that the percentage of games drawn over the last 130 matches is 33%; well above the 10-year average of 25%.”

Davy is forecasting full year (2009) earnings per share totals of 20.7p for Ladbrokes, 17.1p for William Hill and 118.1c for Paddy Power.

William Hill is expected to publish a trading statement later this month, but no updates are due from Paddy Power and Ladbrokes.