Paddy Power eyeing 'Flutter' on new international markets

Paddy Power-Betfair is looking to enter more new markets in mainland Europe through additional bolt-on acquisitions.

Paddy Power eyeing 'Flutter' on new international markets

Paddy Power-Betfair is looking to enter more new markets in mainland Europe through additional bolt-on acquisitions.

The betting services group is also looking, subject to shareholder approval, to change its name to Flutter Entertainment.

The new name will be for the overall holding company of the business and will not replace the Paddy Power or Betfair consumer brand names.

Paddy Power last month acquired a controlling stake in Georgian online betting firm Adjarabet for €115m, with an option to buy the rest of the company after three years.

Chief financial officer Jonathan Hill said the group will continue to look for strategic bolt-on acquisitions in "other markets in Europe or other geographies".

He said, however, the group is comfortably off in its core markets of Ireland, Britain and Australia and is only likely to grow organically in the US.

Paddy Power shares fell by almost 2.5% after it posted an 11% drop in full-year pre-profits for 2018, to £219m (€254m). Group revenue grew 9% to £1.87bn.

Online revenue grew by 5% to £948m, with market share growth evident in the UK. Growth was also seen in the Australian and US operations, but sales were slightly down in retail.

Paddy Power-Betfair is likely to take a £20m revenue hit from the doubling in tax being introduced this year for Irish-based betting services providers; and a £30m revenue hit from the UK Government slashing maximum stake amounts for in-shop betting machines.

Chief executive Peter Jackson said the group could gain more customers as rivals - such as Ladbrokes-Coral - close UK shops in response to tightening UK regulations.

However, he said Paddy Power would not be closing nor acquiring shops.

"Good momentum" has been seen in trading in the first quarter of this year, with management saying the business is "well-positioned" for further growth, despite likely further regulatory challenges in key markets.

Among its growth objectives are organic growth in core markets, the further internationalisation of the Betfair betting exchange brand, pursuing the US market "rigorously" and gaining "podium positions" in fast-growing regulated betting markets.

Mr Jackson said the opening up of the US market is the biggest thing to happen to the industry since the advent of online betting.

He said the US offers "a very significant long-term future growth opportunity".

The group's US operation is not expected to reach break-even point until next year, however.

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