Paddys cuts profit forecast after 0% online growth
Irish bookmaker Paddy Power blames poor sporting results in last four months as year-to-date online revenue shows 0% growth
Paddy Power has slashed its operating profit growth forecast by 11m after a poor online sportsbook performance has seen the operator achieve 0% growth in non-Australian online revenue so far this year.
Total net revenue in the period from 1 July to 17 November failed to grow after online sportsbook revenue, excluding Australia, shrank 11%, despite amounts wagered increasing 15% and gaming rising by 17% in the period.
The operator blamed the drop in revenue on unfavourable sports results including the Australian Spring Racing Carnival and Champions League football results.
“We now expect to achieve low to mid single digit percentage operating profit growth in 2013 in constant currency”¦this is approximately 11m lower than the mid-point of our guidance at the time of our Interim Results,” the firm said in a statement.
Paddys’ egaming and B2B operations recorded growth of 17% whilst mobile continued to be a key part of the business with 63% of active customers using the channel and mobile representing 47% of total online revenue.
Paddy Power said it plans to boost its mobile revenues with a number of new products over the coming months following the launch of a new tablet games app and the launch of the operator’s latest live casino site which included new native Android and iOS mobile and tablet apps.
Despite non-Australian online revenue failing to grow Paddy Power’s Australian business performed strongly during the four-and-a-half month period with amounts staked online growing 26% compared to the same period last year and online net revenue rising by 30%.
In Italy the firm, which recently became the first licensed operator to offer customised fixed-odds sports markets and horse race betting online in the country, also maintained its sports betting market share of 8% to 9% after seeing average sportsbook stakes rise 84% in September to October compared to June to August.
The firm noted the UK had become more competitive in advance of the introduction of the point of consumption tax in 2014, but it hadn’t increased its marketing spend beyond 20% of revenue as it continued to focus on social media as an acquisition tool.
“During this period of industry change, competition is intensifying and we will continue to invest efficiently to maintain and enhance our competitive position for the long term,” the company said.