Paddy Power raises forecast as online sportsbook returns to growth18th November 2014 8:43 am GMT
Irish bookmaker Paddy Power has increased its earnings expectations for the full 2014 year following a strong performance in the third quarter of 2014 which saw total net revenue increased by 38 per cent.
The operator said that it benefited from good top-line growth and favourable sports results during the twenty-week period between July 1st and November 16th, with total sportsbook amounts staked up 14 per cent versus a year ago.
Net Revenue for July 1st and November 16th 2014
|Online (ex Australia)||42%|
Total online net revenue rose 42 per cent year-on-year, with the company’s industry-leading mobile channel representing 58 per cent of the total.
Online net revenue (excluding Australia) increased by 42 per cent with sportsbook stakes up 16 per cent compared to a year ago.
Following a difficult first half of the year due to adverse sporting results and currency fluctuations which led to a 5 per cent decline in sportsbook net revenue, the product returned to growth in Q3 with net revenue up 60 per cent. Online gaming/B2B also performed well with net revenue growing by 20 per cent.
Within this, the company’s UK and Irish online business, Paddypower.com, grew its sportsbook net revenue by 59 per cent, benefitting from the largest year-on-year gross win percentage rebound amongst its divisions.
Total active customers increased by 33 per cent, with customer acquisition up 23 per cent, boosted by the World Cup. The operator’s Italian online business, Paddypower.it, grew its net revenue by 72 per cent in the period.
Online amounts staked in Australia rose 21 per cent, with online net revenue climbing 41 per cent. Total net revenue grew 43 per cent year-on-year.
“In Australia our track record of strong momentum and increasing market share continued in the period,” said Paddy Power. “Online customer acquisition was up 23 per cent, while active customers increased by 37 per cent, with a strong performance at the recent racing Spring Carnival.”
Retail net revenue increased by 14 per cent on a like-for-like basis, with the company opening 73 shops in the year to date (53 in the UK and 20 in Ireland), bringing its total estate to 562 units. Including new shops, sportsbook stakes rose 15 per cent and total net revenue by 31 per cent year-on-year.
Paddy Power’s Irish retail business saw sportsbook stakes climb 4 per cent and net revenue by 11 per cent, continuing the positive trends reported since the start of last year.
In UK retail, sportsbook stakes grew by 2 per cent with total net revenue up by 16 per cent year-on-year. Sportsbook net revenue climbed 20 per cent, while machine gaming revenue increased by 12 per cent versus the comparable period last year.
As a result of the strong revenue performance in Q3, Paddy Power’s board has increased its 2014 earnings expectations, with earnings per share for the full year expected to see mid to high teens percentage growth.
As at November 16th the company had no debt and cash of €279m, or €206m excluding customer balances. Paddy Poer has so far purchased 450,000 shares, or 0.9 per cent of issued voting share capital, for €23.3m as part of its share buyback programme announced back in August.