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Strong 2010 Start for PaddyPower

5/18/10 - In an interim management statement this week, the chairman of online and land gambling group Paddy Power plc, Nigel Northridge, has reported strong year-to-date trading from 1 January to 16 May 2010.
 
After a year in which the bookie group grew turnover and market share across all its channels, and expanded internationally through successful acquisitions in Australia, continued shop openings in the UK and a B2B agreement in France, 2010 is off to an equally promising start, he noted.
 
Highlights of 2010 to date have been a very strong revenue performance in online operations (total gross win (ex Australia) +32 percent) and good bet volume growth across all channels.
 
"Significant investment has contributed to this growth and we continue to invest to maintain our business momentum and strong competitive position," said Northridge. "Following a run of adverse sporting results in 2009, I am also pleased to report that the Group’s sportsbook gross win percentages have returned to normal expectations in the year to date.
 
"Online (ex Australia) sportsbook amounts staked grew by 19 percent and bet volumes by 39 percent. Gaming gross win grew strongly by 32 percent driven by internet games, casino and bingo operations, which have benefitted from additional direct investment in product, people and promotion, as well as the strength of our sportsbook.
 
"Operating costs have increased as a result of this growth and investment to drive future growth, with operating profit year to date modestly ahead of our expectations."
 
Turning to retail and telephone business (ex Australia), Northbridge revealed that Irish retail amounts staked decreased by 2 percent. On a like-for-like basis excluding new shops, bet volumes increased by 5 percent, amounts staked decreased by 5 percent and gross win decreased by 6 percent.
 
"UK Retail expansion continues on track with nine shops added in the period and recent openings performing well. On a like-for-like basis, bet volumes increased by 4 percent and total gross win (or net revenue) by 0.5 percent," the chairman revealed. "Telephone bet volumes grew by 18 percent but a decline in average stake resulted in a 2 percent decline in turnover.
 
"Nonetheless, gross win grew strongly from the return to a normal gross win percentage," he said.
 
In Australia, the group's activities in telephone and like-for-like retail operating costs have been flat in the year to date.
 
Australian amounts staked increased by 23 percent with online growth of 31 percent. Online growth moderated slightly over recent months as the first anniversary of advertising deregulation passed.
 
As at 30 April 2010, Paddy Power had net cash of Euro 96 million, including customer balances of Euro 37 million and net of Euro 16 million of debt in its Australian subsidiaries.
 
Northridge was optimistic about the future: "With the strong momentum in the business, significant ongoing investment to enhance our competitive position, and the upcoming World Cup, the Board looks forward to the balance of 2010 and beyond with confidence," he said.

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