Shares up 20% on strong set of results

Shares in Paddy Power rose by nearly 20% yesterday on the back of the betting services firm issuing a strong set of interim results, upping its full-year profit forecast and announcing a proposed merger with online rival Betfair.

The company reported operating profits of €80m for the first half of this year; up 33% on a year-on-year basis; with net revenue up 25% to €528m. Double digit sales growth was evident across all online and retail divisions. An interim dividend, of 60c per share, represented a 20% annualised increase. Management noted a strong trading start to the second half and upgraded its full-year profit guidance, to include mid-to-high single digit percentage growth.

“Underlying operating profit was up 68%, excluding the impact of new taxes and product fees. While this performance was broadly-based across all our online and retail divisions, Australia has been the standout with reported operating profit up 78%,” chief executive, Andy McCue said.

The company’s share price was up by over 19.5%, yesterday, at €93 on the back of its strong newsflow.

Meanwhile, Betfair, issued a strong set of first half figures; which included a 15% year-on-year increase in revenue to £135.4m (€184m). Breon Corcoran, Betfair’s chief executive, said the proposed merger with Paddy Power is “hugely exciting”.

“It would create a truly global sports betting group, with unmatched products and talent, and significantly enhanced scale,” he added.