Paddy Power sportsbook drives 34% revenue growth
Irish operator reports online net revenues of 345m for the first half of the year, confirms it is in talks with Betfair over potential mega-merger
Paddy Power this morning reported online net revenues for the first half of 2015 were up 34% year-on-year to 345m, driven by a 37% increase in revenues from its UK and Ireland-facing sportsbook division and continued growth in Australia.
The numbers were released at the same time as Paddy Power and Betfair confirmed they were in talks over a potential mega-merger that would create a new online gaming giant with combined retail and online revenues of more than 1.5bn.
The Irish bookmaker reported strong growth across the board for the six-month period ended 30 June, particularly in sportsbook where revenues across its entire digital business increased 42% to 264m, while online profits across the business leapt 45% to 70m.
Net revenues in its core UK and Ireland paddypower.com sportsbook business grew 37% to 119.1m off the back of a 9% increase in stakes to 1.7bn, which the operator described as its “most significant year-on-year gross win percentage rebound of all our divisions”.
Paddy Power said growth from its egaming/B2B division, which was up 14% to 18.9m, was driven primarily by mobile, with net revenues from the channel increasing 60% during the period to account for 55% or 10.4m of total online game revenues.
The figures take the operator’s total online revenues, excluding its Australia business, for the six month period to 200.1m, a 26% increase on the same time last year. Paddys revealed that PoC in the UK and Irish egaming VAT increased costs by 28m at a gross level.
In Australia, net revenues were up 46% to 151.5m, driven by a 39% increase in sportsbook stakes to 1.2bn, which saw operating profit grow 69% to 38.8m. Mobile turnover increased 81% to 780m or 64% of online stakes, with 84% of online customers transacting through the channel.
Paddy Power’s Italy-facing paddypower.it site posted a 24% increase in net revenue as operating loss fell from 8.9m to 4.7m this year, although the firm said it “still had a way to travel to profitability” after pledging its commitment to the market earlier this year.
Paddy Power CEO Andy McCue said his firm had “delivered a very strong performance” in the first half of the year, but noted that Australia had been the “standout”.
“We have made substantial progress implementing the strategy we set out in March, with further payback to come from new mobile product releases, refreshed marketing campaigns and efficiency gains,” McCue added.
Total group net revenues, including the firm’s retail business, were up 25% to 527.8m leading to an operating profit of 80.1m
Paddy Power’s share price was up 14.5% to 89.95p at the time of writing.