Paddy Power profits rise 54%

PADDY POWER enjoyed a strong return to growth during the first half of the year, with pre-tax profits up by 54% on the same period last year and earnings per share rising by 31%.

The leading Irish bookmaker yesterday reported pre-tax profits of €52.5m and underlying earnings per share of 82.2c, for the first six months of the year.

The strong showing — which also included a 53% increase in gross win to €205.6m — was driven by good takings from the Cheltenham Festival and the World Cup in South Africa.

The company described its business from that tournament as “exceptional”; not surprising as it, alone, resulted in a gross win of €18m for the firm; more than four times what Paddy Power managed to take in from the last two major international soccer tournaments (namely, the 2008 European Championships and the 2006 World Cup in Germany).

At the announcement of the company’s 2009 full-year results, earlier this year, chief executive Patrick Kennedy said that, despite a 15% fall in pre-tax profit and an 8% fall in operating profit, significant increases in the company’s financial performance should be seen over the coming years due to the firm’s international expansion into territories like Australia and France.

That statement was further borne out, yesterday, by a 43% year-on-year increase in first half operating profit to €49.5m.

“The group’s strengths — product innovation, better value for customers and brand differentiation — position us well for further growth.

“We’ve significantly strengthened our online market position. At the same time, we continued to expand internationally, whilst increasing market share in retail,” Mr Kennedy said yesterday.

The company remains open to new geographical opportunities, on both business-to-business and business-to-consumer platforms.

On an existing divisional level, profits were up in online, static in telephone betting (where the fall in business in Ireland is being offset by growth in Britain), up in British retail and down in Irish retail. On the retail side of things, management sees “enormous” opportunity for growth in Britain, where it controls 1% of the market.