Australia and mobile drive Paddys growth
Online net revenue grows 37% year-on-year following Sportsbet acquisition " Nevada licence application at advanced stage.
Paddy Power has seen continued strong growth from its Australian operations in the period from 1 January to 15 May, the operator revealed in an interim management statement today.
Online net gaming revenue from the region rose 37% year-on-year following the February 2011 acquisition of Northern Territories-licensed Sportsbet, while for the operator’s dot.com operations in the rest of the world the growth figure was 28%.
Sportsbook saw the greatest revenue growth within PaddyPower.com, with a year-on-year NGR growth of 30%, with gaming and B2B net revenue up 25% compared to the corresponding period in 2011. Retail revenues also grew year-on-year, by 13% in the UK and 15% in Ireland.
Mobile revenue also remains strong, with 241% growth year-on-year, though the company did not release figures to give evidence of the growth. Mobile sportsbook grew to account for 23% of total amounts wagered in Australia, and 38% for Paddypower.com, while mobile games made up 15% of total gaming revenue in January 2012, with finance director Jack Massey telling eGaming Review this morning that the figure “continues to improve.”
Paddys coupled gaming and B2B net revenues in the trading update, highlighting a 25% year-on-year rise across all activities, Massey revealed that bingo had been the fastest-growing segment, while casino and games had enjoyed consistent growth during the period.
On the subject of poker, Massey admitted that it was “a difficult competitive environment, though we have managed to hold revenue and player numbers. It hasn’t been a big driver of growth, but we have been more successful than companies without a sportsbook, which have to compete directly with the likes of PokerStars.”
He refused to comment on the rumoured iPoker Network split, which would see leading sportsbooks including Paddys, Bet365 and William Hill ring-fence their liquidity, creating an ‘iPoker 2’ network, but said: “On a group level we [the sportsbooks] do share the same problems, so we are always looking into ways to boost poker and innovate in the sector.”
The four-and-a-half-month period saw Paddy Power take its commercial agreement with skill games provider GameAccount Network into Italy, while the operator has also confirmed to eGaming Review that it has invested “significant time and resources” in a Nevada licence.
Massey revealed that Paddy’s application for a Nevada licence is at an advanced stage, with the company set to have a hearing to discuss the application with the state’s Gaming Commission: “We haven’t got a date scheduled for appearing before the commission, but we have no reason to believe that there will be any problem with Paddy Power’s application.”
Paddy Power’s Annual General Meeting is due to take place in Dublin this morning, and chairman Nigel Northridge said in his AGM statement that “Our organic entry into the Italian online market went ‘live’ on schedule this week.”
Spain is another target market, with Paddys submitting an application for a licence late last year and hoping to be among the first to enter the market once it opens on 1 June.
The period also saw Paddy Power sign a UK and Ireland betting partnership with Manchester City FC ahead of the football club winning the English Premier League title.
Despite stating that “Paddy has delivered another impressive performance and in our opinion has the best balanced business in the sector,” analyst Nick Batram of Peel Hunt retained his firm’s ‘Hold’ recommendation.
“Whilst we remain big admirers of Paddy the valuation prevents us from being more positive with our recommendation,” he explained.