Paddy Power disregards 'unfavourable' sporting results to predict gains for 2015

Paddy Power still expects its full-year operating profits for 2015 to show a mid-to-high single-digit percentage increase despite “unfavourable” sporting results since the beginning of July.

In a trading update on the second half of the year, the betting and gaming giant said group revenue increased by 9% on an annualised basis, with trading in line with expectations.

It follows a strong first half, where operating profits rose by 33%, year on year, to €80m and net revenue increased 25% to €528m.

That detail was almost totally overshadowed by the August announcement of the company’s agreed merger with UK rival Betfair.

On that matter, Paddy Power yesterday said that relevant filings have been submitted to regulators and shareholder documentation is likely to be published soon.

British bookmaker Paddy Power reported a https://t.co/d5ShZmYPST

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For the last four months, sports betting stakes were up 23% online and net revenue in that division was ahead by 7%.

In retail, sports betting stakes grew 12%, with net revenue again up by 7%.

The Australian online business continued strong growth, with revenues up 33% in constant currency terms, although revenues were down 9% in the UK and Ireland online.

The company’s Irish retail division, however, saw like-for-like stakes bet over the counter grow by 8% and net revenue rise 4%.

Paddy Power opened seven shops each in the UK and Ireland over the period.

“Top-line growth for the group has been strong, notwithstanding the comparative period benefitting from both very favourable sports results and the concluding stages of the football World Cup,” it said.

In a research note for Davy Stockbrokers, analysts David Jennings and Robert Stokes said: “The overall picture is unchanged.

"We see excellent potential arising out of the proposed merger with Betfair, a deal that management still expects to close in the first quarter of 2016.

"The proposed merged entity remains our top pick in the sector.

“While headline guidance is unchanged for the year, it is clear that the efficiency drive that management instigated at the beginning of the year is reaping benefits.

"This bodes well for future year earnings when gross win margins normalise.”