Paddy Power Betfair online revenues up 5% as gaming outgrows sports
London-listed firm reports online revenues of close to £1bn as PPB proposes to change its name to Flutter Entertainment plc
Paddy Power Betfair (PPB) this morning reported 5% growth in FY18 online revenues to £948m ahead of a planned name change of the group to Flutter Entertainment later this year.
Gaming revenue for the period was up 13% to £273m, with the “significant turnaround” primarily driven by Paddy Power where cross-sell rates climbed 3pp following product improvements.
Sports revenue was up 3% to £678m, with sportsbook revenue up 6% and exchange and B2B revenue down 2%.
PPB again pointed to cancelled fixtures in Q1 as the reason for the Exchange downturn, saying revenues were flat across the last three quarters.
“While this trend reflects the products maturity, the exchange remains a key differentiated product for Betfair and, when combined with our sportsbook, offers customers an unparalleled sports-betting experience,” the firm said.
PPB also today revealed plans to change its group name to Flutter Entertainment plc to reflect its growing portfolio of brands, including the recently acquired Adjarabet business.
The overall group increased revenues by 7% to £1.9bn with underlying EBITDA down 5% lto £451m thanks to investment in the US.
“I’m really pleased with the way that the Group performed in 2018 in what was a challenging year for the sector with regulatory and tax changes,” said group CEO Peter Jackson.
“Our collection of challenger brands are well positioned in their local markets. Paddy Power has regained its mojo, taking share following product improvements and some of our “classic” marketing. Betfair, our unique combination of product that appeals to customers around the world, will be improved by our ongoing investments in languages and localisation.”
The US business generated £234m in revenue, with £10m profits from DFS, casino and horseracing offset by sportsbook start-up costs of £24m.
“The opening of the US online sports betting market has the potential to be the most significant development to occur within the sector since the advent of online betting,” Jackson said.
“Rather than announcing our plans, we have moved quickly to give ourselves the best chance to win in that market. We are confident that FanDuel’s nationally recognised sports brand, 8 million customers, our Group betting expertise, and our market access partnerships position us very well.
“Our success to date supports this view, with FanDuel achieving a 35% online market share in New Jersey in its first 5 months of operation, and Meadowlands becoming a marquee venue for sports betting”.