The strong start to 2012 follows on from a year that saw significant double-digit percentage growth in group profits and revenue.
At Paddy Power’s AGM in Dublin yesterday, chairman Nigel Northridge told shareholders the continued momentum seen in the first five months of this year has been supported by “substantial ongoing investment”.
“Given the current strong momentum and position of Paddy Power, and the substantial opportunities that exist in online betting, the group is now investing at an increased rate for further expansion,” Mr Northridge said.
“Our organic entry into the Italian online market went live on schedule this week. We’re also increasing the resources assigned to mobile gaming and other business development opportunities.”
Mr Northridge added that the group “retains significant financial flexibility”, with net cash of €202m.
This year’s revenue growth has been driven by a 31% like-for-like rise in online revenue, a 26% increase in retail revenue and a whopping 241% jump in mobile phone betting revenue.
Net revenue from Paddy Power’s Irish retail business is up by 15% so far this year, even though amounts staked over the counter are down by 4% on a like-for-like basis. Revenue was up 13% and stakes bet rose by 10% in its UK retail division.
The company’s move into Italy continues its aggressive international expansion drive, which has seen it enter Australia, France, Canada, and Bulgaria in the past few years. It has also applied for licences in the US, specifically Nevada — a process that was “well advanced”, said chief executive Patrick Kennedy.
“We wait optimistically,” he added.
Mr Kennedy also reiterated the company’s broad support for the Government’s proposed 1% turnover tax on bookmakers’ online operations — so long as it is introduced on a ‘level playing field’. The move would hit Paddy Power’s annual operating profits to the tune of around €6m, but the company is concerned over the ability to tax those operators who are not domiciled in Ireland but still generate a revenue from punters here.