Australia the highlight for Paddys as 2014 online profits rise 17%
Sportsbet Australia business profits up 56% to 52.5m to account for more than 60% of Paddys' total digital profit with non-Aus business up just 3%
Huge growth in its Australia-facing Sportsbet business pushed Paddy Power online profits up 21% for the full-year 2014 with non-Australian business showing more modest 3% growth despite a 17% rise in revenues to 553.5m, the operator reported this morning.
The Irish bookmaker posted solid growth in customer acquisition and staking across the business, with sportsbook net revenues up 17% to 412.9m and egaming and B2B revenues up 18% to 140.5m year-on-year for the period ended 31 December 2014.
Australian online sportsbook stakes were up 15% to 1.9bn and net revenue up 26% to 226.9m, leading to an operating profit of 52.4m, a 56% increase on the previous year with Sportsbet online revenues accounting for almost 60% of Paddy’s total digital revenues during the period.
Excluding Australia, online operating profit grew just 3% to 75.3m, which Paddys attributed to a 3m “headwind” from the introduction of the UK Point of Consumption (PoC) tax in December, plus adverse sports betting results which had a negative gross impact of around 14m.
Sportsbook stakes outside of Australia grew 25% to 2.76bn, however, a one percentage point reduction in margin to 7% meant that net revenues increased by just 7% to 194.2m, falling behind Sportsbet revenues for the first time.
UK and Ireland sportsbook stakes were up 18% and new customer acquisitions were up more than a third (39%) compared with last year.
Football customer acquisition was up 31%, actives up 18% and stakes up 16%, and the firm said its core UK and Ireland-facing paddypower.com business “rebounded strongly” in 2014 as it “addressed the competition” that arose as operators “jockeyed to gain scale and momentum” ahead of PoC being introduced.
Paddys said it increased its sportsbook TV advertising share of voice from 5% to 15% during the period, with a particular focus on football, an area in which it acknowledged it was “under-penetrated” and offered a “significant opportunity” for growth.
Mobile accounted for 55% of the operator’s total online revenues, with 77% of active sportsbook users and 45% of egaming customers using mobile in December, despite discontinuing its Roller Casino mobile application.
Paddy Power’s Italy-facing paddypower.it site saw an 85% or 7.9m increase in net revenue last year, but still posted an operating loss of 14.7m.
Paddy’s said that despite having achieved “meaningful” sportsbook market share in Italy, overall market growth “remains slower than expected” with the bookmaker “undertaking a review of the opportunity” in order to better position itself in the market.
Total group net revenues, including the company’s retail division, were up 18% to 881.6m year-on-year, while the company said it would return almost 400m to shareholders through surplus cash and planned debt raising, suggesting it has no plans for M&A activity in the near future.
Paddy Power’s share price was up almost 10% to 72.90 this morning.