Bookmaker raises outlook for full-year earnings growth

BOOKMAKER Paddy Power raised its outlook for full-year earnings growth yesterday, highlighting the strong growth of its online and mobile services and sending its shares to a record high.

“Despite difficult economic conditions, the structural growth drivers behind online betting (and) betting on mobile are so strong that we have been able to grow strongly despite the challenges of recession,” Paddy Power finance director Jack Massey told Reuters in a telephone interview.

The company said that it expected full-year earnings per share to rise by 15% to 20% year-on-year after its online gross win — winnings before expenses — to mid-November rose by 28% compared with the same period last year.

In August it had said that analysts’ forecasts for full-year adjusted earnings per share of €1.93, a 14% increase, sounded right.

Paddy Power’s digital revenue has long outstripped weak trading at Irish betting shops and it made almost as much profit through its website and mobile phone applications in the six months to June 30 as it did overall in the first half of 2010.

The group has also taken a lead in the fast-growing mobile phone market in Britain and the proportion of active customers transacting via mobile increased to 44% in October from 35% four months earlier.

Paddy Power said its total gross win grew by 12% year-on-year in the period July 1 to November 14, while the amount staked by punters rose by 13%, with growth accelerating in particular in its Australian online operations.

“Overall this is a strong set of numbers with good momentum continuing across the main parts of the business,” Davy Stockbrokers analyst David Jennings said, adding that he would raise his full-year earnings per share forecast by 2% to around €2.06.