Profitable Euro 2016 for combined Paddy Power Betfair

paddypowerbetfairPaddy Power Betfair’s third-quarter revenue performance for its sportsbook was flattered by the recent decline in the value of the pound but still managed a 15% rise in constant currency terms over the period.

Total sports net revenue came in at £316m. Adding in gaming net revenues of £88m, which rose 14% in constant currency terms, and the total net revenue for the three months to September came in at £404m.

The company said it benefitted from a strong conclusion to football’s European Championships in the summer which generated £16m of revenues in July, bringing its total for the tournament to £38m.

The company said the revenue uplift provided proof of the benefits of scale. Breon Corcoran, chief executive, said: “Work is underway to combine the best of Betfair and Paddy Power’s technology into a multi-brand, multi- channel, multi-jurisdictional platform that will start to unlock the full potential of the group’s scale and will lead to increased pace of development and faster roll out of new products.”

In online, total revenue rose to £222m with sportsbook revenue rising 21% on a constant currency basis and the exchange business rising 9% on the same terms. The company said the exchange benefitted particularly from Euro 2016 and favourable sports results that helped push revenues from high-value customers.

The Australian operations continued to shrug off the regulatory worries affecting the market. Revenues increased 21% in local currency terms, driven by a 17% increase in stakes and rising margins. However, an indication of troubles ahead was that the in-play “Bet Live’ product – under increasing regulatory scrutiny at a Federal level – now accounted for 15% of all stakes versus 6% in the comparative period. The product was withdrawn early in October at the request of the Northern Territory Racing Commission (the state’s regulatory authority).

In retail, the company said the UK and Ireland shops saw revenues increase 11% on a constant currency basis with like-for-like revenues increasing 9%. The bulk of this – 8% – was due to a rise in sports-betting revenues, helped by favourable sporting results. Machine gaming growth came in at 10%. It’s total estate across the two countries now stands at 606 shops.

The company said that a corporate level, the integration work between the two firms was progressing well and that it was ahead of plan to deliver the £67m of synergies. It now expects £35m of synergies to be delivered in 2016, £5m ahead of forecast. The company now expects EBITDA for the year to come in at between £390m and £405m.

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