Paddy Power savings targets ‘conservative’

Newly-merged betting services group Paddy Power-Betfair is expected to make higher cost savings, over the next three years, than the £50m (€58m) level suggested when the two companies merged earlier this year.

“With the benefit of seven months since the deal closed, we would be surprised if confidence hasn’t increased around the potential to make bigger savings than previously suggested. In addition, against the backdrop of higher promised synergies elsewhere, the £50m figure is starting to look conservative,” said Davy Stockbrokers’ leisure sector analysts David Jennings and Robert Stokes in a joint report on the company, published yesterday.

The report previews the group’s interim results, due next Wednesday, the first set of major figures since the merger. Davy is anticipating earnings – on an EBITDA basis – of £179.5m for the six months with strong growth coming from online, Paddy Power’s Australian operations and Betfair’s US division.