Paddy Power Betfair Reports 16 Percent Revenue Growth
The newly merged betting giant Paddy Power Betfair has reported 16 percent revenue growth for the first quarter of this year, ending March 31. The results were particularly boosted by strong performance from their Australian Sportsbet brand.
However, the results were lower than anticipated which resulted in a share drop in early morning trading. While revenue rose 16 percent to £339 million, analysts from Davy had predicted £352 million and Goodbody Stockbrokers had forecast £341 million.
Despite this, Paddy Power Betfair reported strong performance across all divisions with gaming revenue up 17 percent to £60 million. Sportsbook revenue rose 17 percent to £135 million with retail revenue growing 5 percent £58 million and online revenue rising 17 percent to £195 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 27 percent to £59 million with its operating profit rising 36 percent to £43 million.
Their Australian Sportsbet business showed particularly strong growth with online sports stakes rising 31 percent to £577 million, although unfavourable sports results kept revenue growth at 25 percent to £58 million. Active customers in Sportsbet increased 42 percent, accounting for the growth.
Sportsbet claims that its strong growth was due to its online in-play betting app. Live in-play betting has been banned in Australia with the government planning to close a loophole that has allowed bookmakers to offer a feature that makes an automated call and thus does not violate the Interactive Gambling Act 2001 that only allows in-play betting via telephone or at retail shops. However, unlike these bookmakers, Sportsbet’s app makes an actual phone call which it says does not violate the ban.
April 16, 2017