Paddy Power shares fall as Donald Trump victory eats into winnings

Shares in betting services firm Paddy Power-Betfair fell by over 3% yesterday after the company said fourth-quarter revenues took a £40m (€46.5m) hit on the back of unfavourable sporting results and the outcome of the US presidential election.
Paddy Power shares fall as Donald Trump victory eats into winnings

The company lost £5m, alone, on the US election. Around £4m of that went to people who bet on a Donald Trump victory, but the company had also made the early call to pay out — in October — on a Hillary Clinton win, which cost it nearly £1m.

A string of unfavourable football results — particularly a large number of favourites winning English Premiership matches — also negatively affected Paddy Power-Betfair’s fourth-quarter performance.

Those results saw online revenues fall by 3%, year-on-year, in the fourth quarter.

Total group revenue, for the last quarter, rose by 10%, though, to £388m. The £40m hit doesn’t account for the recycling of winnings.

In its latest trading update — ahead of the publication of annual results in March — the company yesterday said 2016 group revenues jumped 18% to £1.55bn.

It added that underlying earnings should come in at the mid-point of its previously guided range of £390m-£405m.

Analysts had expected earnings at the lower end of that guidance, on the back of recent poor performance updates from peers Ladbrokes and William Hill.

Paddy Power-Betfair shares were down by 3.1% at €96.80 in Dublin.

The company said that the benefit of its wide-reaching international footprint was highlighted with a strong performance from its Sportsbet business in Australia, which saw revenue growth of 18% in the fourth quarter and amounts staked by customers jump by 25%.

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