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Online bets driving Paddy Power's growth

Just on half of Paddy Power's operating profits emanated from its online operations, the Irish company disclosed whilst announcing its 2008 first half results this week. Total income from the firm's online activities was Euro 67.3 million, a 10 percent rise on 2007 H1's Euro 61 million.
 
Operating profits from the online operations totalled Euro 21.1 million, a 43 percent rise on the Euro 14.8 million achieved in 2007. The UK and Irish retail activities of the group contributed Euro 21 million in operating profits, a slight decline on the Euro 21.9 million achieved in the same period last year.
 
Paddy's UK and Irish retail outlets generated gross income of Euro 151.8 million, a 6 percent increase on last time's Euro 143.7 million in 2007.        
 
Sports betting results have been kinder to the players than the bookies, with a string of unfavourable results the statement noted. This prompted the company to downgrade its operating profit outlook for the full year from

English Harbour Casinoapproximately Euro 82 million to Euro 75 million, representing growth of Euro 3 million over the 2007 level of Euro 72 million." Sterling depreciation is also expected to reduce operating profit overall by approximately Euro 5 million.
 
Nevertheless, CEO Patrick Kennedy appeared satisfied with the company's first half performance, pointing out that the successes of the online divisions, which had contributed 47 percent of the group's earnings prior to interest and tax. Telephone betting operating profit was down significantly - by 47 percent - at Euro 2.9 million.
 
Expansion plans continue, with the group aiming to have 150 UK betting shops in operation by the year 2011.
 
Shareholders received a total of Euro 31 million in returns, still allowing the company to retain a cash balance of Euro 79 million at the end of H1 2008.



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