Paddy Power growth driven by mobile and Australia
Online revenues up 29% as mobile contributes industry-leading 43% of the Irish operator's online revenue
Mobile revenues doubled at Paddy Power during the first half of the year, helping push online profit up 19%, with the Irish operator predicting 90% of future online growth would come through the mobile channel.
Online net revenue rose 29% year-on-year to 243m with mobile revenues increasing 100% to 104m, representing an industry-leading 43% of the Irish operator’s total online revenue.
Paddy Power chief executive Patrick Kennedy also highlighted the “excellent performance” of the group’s Australia business, which recorded a 33% increase in online revenues year-on-year to 86.5m.
Mobile was a major part of the growth story in Australia with mobile turnover more than doubling in the period to 274m or 35% of online stakes, with 65% of online customers transacting via mobile in June
Paddys also expanded its presence in Italy with its market share rising to 9%, but a major investment in marketing pushed operating costs for the region out to 9.6m for H1 with overall online profit increasing to 28% with Italy excluded from the results.
The firm said it was on track to break even in Italy in 2014 with mobile once again driving revenue growth with Paddys reporting 40% of sportsbook stakes in Italy came through mobile and a mobile market share of 20%.
“Rolling our mobile leadership into Italy is going to help us drive market share,” Peter O’Donovan, head of online at Paddy Power, said.
Sports betting remains the company’s biggest revenue driver, with online revenues up 31% year-on-year to 181.9m despite the corresponding period including the 2012 European Championships.
Gaming and other revenue also increased, rising 19% year-on-year to 61.4m despite a fall in poker revenue, which Paddys blamed on a declining market.
There was a 23% increase in active customers during the period, up to more than 1.4 million with Paddy Power increasing its marketing spend by 5m in the period.
Paddys, renowned for its marketing stunts, has signed a range of deals in recent weeks including its controversial sponsorship of semi-professional football club Farnborough FC, and has indicated that more outlandish stunts could be on the way in the build-up to next summer’s FIFA World Cup.
Paddys’ share price fell 1.12% in morning trading after the operator highlighted poor sporting results in H2, which have reduced its gross win by an estimated 15m, but Kennedy said the firm remained very positive about future growth.
“Despite very poor recent sports results, we are on track to achieve low to mid double-digit operating profit growth in constant currency in 2013,” Kennedy said.