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NEWS 8 August 2018
Paddy Power Betfair profit boosted in H1
By Jake Patel

Paddy Power Betfair reported a 4% year-on-year increase in profit before tax to £106m ($136.8m) for the first half of 2018.

The company also reported a 5% increase in total revenue to £867m.

Reported revenue remained flat during Q1, but the build up to and start of the FIFA World Cup helped revenue increase by 13% in Q2.

Q2 online revenue saw a 13% increase alongside a 12% increase in sports and 14% increase in gaming.

Revenue from Australia was up by 19% and revenue from the US was up by 20%. Retail operations also saw a 6% increase.

Peter Jackson, Paddy Power Betfair CEO, said: “It has been a busy and successful few months for Paddy Power Betfair. We have made substantial progress against our strategic priorities and trading in Q2 was good, with all brands and operating divisions contributing to the group’s double-digit revenue growth.”

Despite reporting an increase in revenue across different areas of the business, underlying EBITDA fell by 1% to £217m.

In terms of EBITDA, Paddy Power Betfair predicts that for the full year it is “now expected to be between £460m and £480m, reflecting recent trading momentum, the introduction of additional taxes in Australia and the inclusion of losses from the FanDuel daily fantasy sports business.”

The company also reported £148m in net cash and that £201m was returned to shareholders through dividends and share buybacks.

Earnings per share have increased by 1% and dividends per share grew by 3% to 67p.

The position of Sportsbet in the Australian market has the potential to soften the blow from upcoming tax changes in the country.

“Despite significant upcoming tax headwinds, Sportsbet continues to target further market share gains by using its scale to increase investment in marketing, product and its value proposition,” Jackson said.

The recent deal with FanDuel in the US has also allowed Paddy Power Betfair to establish itself as a prominent force in the US sports betting market.

Paddy Power Betfair also predicted that the changes to stakes on fixed-odds betting terminals in the UK could limit its total machine gaming revenue by 33% to 43%. The UK is also making changes to remote gaming duty and based on Paddy Power Betfair’s H1 earnings, this could result in additional payments of £2.5m.

Jackson went on to say: “We now have much better visibility of the regulatory and fiscal changes in the UK, Australia and the USA, and believe that our scale, leading customer propositions and strong balance sheet mean we are well positioned to build a business that can generate sustainable shareholder returns over the long term.”

 

 

 

 

 

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