Online and mobile drive Paddys growth
Online activities now comprise 79% of group operating profit after 26% YoY growth, while operator announces it will enter Italy this year.
Paddy Power has seen its online arm grow to the point that it now comprises more than three quarters of group operating profit, the Irish operator announced in its results for the year ended 31 December 2011.
Both sportsbook and gaming revenues flourished, up 24% and 29% year-on-year respectively, while a 26% increase in online operating profit for the 12-month period brought its contribution to overall group operating profit up from 72% to 79%.
Group net revenue for the year came in at 499.3m, while overall group operating profit for the period was 119.5m, a 15% year-on-year increase. For online the figures were 295m and 95m respectively.
Mobile growth was also particularly strong, with net revenues rising 299% compared to the previous year, and the 43m contribution from mobile represents 14.6% of Paddy Power’s online net revenues for 2011.
Chief executive Patrick Kennedy (pictured) said in a statement this morning: “These results demonstrate the strides we’ve made in building an international business of scale in regulated markets. Online markets are growing at pace and Paddy Power continues to invest aggressively in talented people, product and technology to capitalise on this dynamic market.”
The operator intends to enter the Italian market this year, explaining in a statement that “We have monitored this market since its regulation in 2006 and believe it is now attractive to enter given the extension in the products allowed and the growth in Italian e-commerce and m-commerce, combined with our significantly expanded capabilities.”
Australian operations grew in 2011 following the acquisition of Sportsbet in February, with net gaming revenue rising 9% year-on-year, while the company confirmed it was “engaging with the Australian Government on this point as they review the legislation which precludes law-abiding operators from offering online betting-in-play and gaming.”
The operator hopes to enter the Spanish market later this year, with sources having indicated to eGaming Review that the first licences are likely to be issued this or next month.
As well as bringing a licence application in Spain, the fourth quarter of 2011 saw Paddy Power enter the North American market through a three-year agreement with the British Columbia Lottery Corporation in Canada.
Last year also saw the company acquire Bulgarian software provider Cayetano Gaming, while the early part of 2012 has seen Paddy Power announce a betting partnership with English Premier League football club Manchester City.
Nick Batram, analyst with Peel Hunt, retained his firm’s ‘Hold’ recommendation, noting that “This was another set of impressive figures from Paddy and the group is the undoubted quality in the sector.”