Paddy Power to grow retail presence

Irish betting and gaming giant Paddy Power still intends to keep growing its retail network, despite its intention to enter a mega-merger with UK online rival Betfair in a bid to hold a sizeable chunk of the ever-increasing digital gaming market.

Online revenues are increasingly driving growth in the betting sector and earlier this week, as part of its interim results, Paddy Power noted a 26% year-on-year increase, to just over €200m in its own European online revenues for the first half of this year.

The same division saw operating profit rise by 21%, on the same period last year, to €31.6m.

Profits were up by nearly 70%, meanwhile, to €38.8m in its online Australian business, with net revenue there growing by 46% to €151.5m.

Earlier this week, Paddy Power announced it had reached initial agreement to merge with Betfair.

They plan to create a €1.5bn revenue-generating entity, called Paddy Power-Betfair plc, which would be dually listed in Dublin and London and 52% controlled by the Irish company.

A deal is unlikely to conclude until some time next year, with due diligence and regulatory hurdles to overcome first.

Away from the online growth prospects, Paddy Power, which would retain its own brand and business model within the planned new entity, has not turned its back on retail.

Speaking at this week’s results, chief financial officer Cormac McCarthy said management still sees attractive opening opportunities in the UK retail position.

He said the company could open 25 new shops in the UK per annum in the next few years.

Total first-half net revenue in its UK retail division grew 21%, year-on-year, to €108.3m, with operating profit up 3% at €12m.

The company closed the first six months of this year with 334 shops in Britain; up 12% on the 299 at the same point last year.

Monetary amounts staked by punters in its UK shops grew by 16% in the first half, to €457m, and there was a 9% year-on-year increase in amounts staked in Irish shops, to €596m.

Operating profit in Irish retail was up 36%, year-on-year, in the first half, at €10.6m, with seven new shops opened here.

“Our retail businesses in Ireland and the UK continue to grow strongly and take market share,” said chief executive Andy McCue.