Paddy Power's start to 2017Wednesday, May 17, 2017 11:39
It was announced during the week that Paddy Power have reported an operating profit of £91m (€107m) in the first quarter of 2017, which is an increase of 114% from the same period 12 months ago. Revenue also saw an increase of 23percent and was valued at just under 500 Million euro.
Some thoughts from the Paddy Power hierarchy
“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,” Breon Corcoran, chief executive, of Paddy Power Betfair said. “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,” Corcoran said.
What was the driving factor behind this increase in profits?
This increase in revenue most hard driven by the successful sportsbook business, that saw sportsbook stakes up 18 percent compared to the same period last year, with Paddy Power also noting in its results that nineteen of the twenty-eight races at the 2017 Cheltenham festival were profitable for the corporate. This was also an improvement on last year where only 11 races of the festival were profitable. This year’s festival was a year for the bookmakers and not the punters. Gaming revenues for Paddy Power were up 6 percent compared to last year. There was also an increase in online revenue by almost 15 percent which had a value of 224 Million. The factor behind this increase in online revenue was predominantly driven by the 33 percent increase in revenue for the Paddy Power sportsbook. Paddy Power also announced that it opened 4 new shops in the UK in the first quarter of 2017. This brings the total number of Paddy Power shops across the UK and Ireland to 618.
It’s not all been plain sailing for Paddy Power
In the past week, Paddy Power share value took a tumble by about 3 percent. "The competitive nature of this industry right now is pretty extreme," said Mr Corcoran. "What we have to remind our shareholders and indeed our competitors is that we have plenty of appetite to compete." There is no shortage of competition in the online gaming industry and Paddy Power are trying to fight off the other companies that want a slice of the Paddy Power pie!
"Since Cheltenham, 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," "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."