Paddy Power is moving?Monday, Jun 12, 2017 16:06
Paddy Power Betfair is to shut its Gibraltar office and switch operations to another of its European sites. The gaming heavyweight said that the move has been discussed as a means of centralising services since the merger of the two gambling and betting companies in February 2016.
It’s believed that the approximately 20-strong workforce will be offered relocation opportunities. Paddy Power Betfair has its base in Dublin, Ireland, and has offices in a number of European countries, including the United Kingdom, Portugal, Romania, Malta and Italy.
Paddy Power and Betfair had set a target of £50m in synergy savings ahead of their merger last year. Paddy Power Betfair has said that growth within its sports betting businesses helped to boost revenue and profit during the three months through to March 31, 2017.
Total revenue in the first quarter came in at £416 million (€491.2 million/$536.5 million), which represents an increase of 23% on the £339 million generated in the same period last year. Sports revenue was up 28% year-on-year to £326 million, boosted by an 18% rise in sportsbook stakes to £2.7 billion, while gaming revenue also climbed by 6% to €90 million.
Meanwhile, underlying operating profit rocketed by 114% year-on-year to €91 million, while underlying earnings before interest, tax, depreciation and amortisation also increased by 87% to £111 million, with a greater margin of 26.6%.
A Profitable Merger
Breon Corcoran, CEO of Paddy Power Betfair, which was formed in February of last year through the merger of Paddy Power and Betfair, said: “Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth. Combined with the annualization of merger-related cost savings and continued focus on operating efficiency, this resulted in a doubling of operating profits in the first quarter.
“Since then, however, at high-profile events such as the Grand National, Premier League football and the US Masters, results favoured customers, and overall gross win margins were weak in April.”
Corcoran also stated: “A key strategic focus for 2017 is the integration of our technology platforms; this project is on track and we expect both our European brands to be operating on a common platform by the end of the year, at which point customers will start to benefit from increased pace of new product delivery.”
Paddy Power Betfair saw revenues and profits soar during its transformational 2016. In its financial results for the year to December 31, the combined group saw revenue rise up 18% to £1.55 billion ($1.9 billion / €1.8 billion), with double-digit growth across all four operating divisions. The company reported underlying EBITDA up 35% to £400 million with EBITDA margin increased to 26% from 22%. Underlying operating profit increased 44% to £330 million.