Tuesday September 20, 2011 : CEO predicts 15-20 percent annual growth with online operations the star
Times may be hard, but Paddy Power appears to be weathering them rather well, according to a report in the Irish Examiner newspaper this week.
Quoting the online and land gambling group's chief executive, Patrick Kennedy, the newspaper reported that he expects the firm's British online betting business to grow faster than competitors in an expanding market.
"I’d back us to grow at 15 percent to 20 percent a year, and continue to take share of a growing market in sales terms during the next three years," Kennedy said, adding that he expected the UK market would grow at 10 percent to 15 percent a year.
Paddy Power’s bet on online gambling and its expansion into markets outside of Ireland are allowing it to boost profit, Kennedy revealed. The Dublin-based company’s investment in mobile technology is putting it "ahead of the pack" in attracting smartphone and tablet gamblers, he said.
The investors appear to share Kennedy's vision; the stock price is up 26 percent this year, giving the company a market value of Euro 1.9 billion.
Kennedy boasted that his company was the first bookmaker in Apple’s online app store for the iPhone and iPad, and is producing a new feature-rich product for tablets.
The company controls some 30 percent of mobile betting in Britain, he claimed, revealing that in July 2011 about 37 percent of Paddy Power’s online customers transacted by mobile device, and that figure will exceed 50 percent "quite soon".
Paddy Power has somewhere between 12 and 15 percent of the Brit online betting market, and has grown its overall online customers at an average rate of 40 percent a year during the last six years, while the average for William Hill, Ladbrokes and Rank Group is 14 percent, Kennedy said.
The company earned 81 percent of operating profit from online operations in the first half of 2011, increasing its active online customers in Britain by 58 percent in the same period. That helped boost first-half profit 9.6 percent to Euro 47.4 million.
The Irish market, where Paddy Power generates about 25 percent of its profit, continues to look "pretty challenging", Kennedy opined, with the average size of bets staked in the first half falling to Euro 17 from Euro 22 three or four years ago, probably due to difficult times in the economy.
Kennedy also expects to grow the business in Australia by more than the average overall annual growth at present of around 10 percent following its acquisition of Sportsbet in March 2011.
Kennedy said that the company keeps the possibility of legalised online gambling in the United States under review.
"I think poker will be the first market that opens up, and poker will open up in the States either in certain large states or overall," he said. "I think that is an opportunity for us but I think the big opportunity would be if sports betting opened up."