Paddy Power Betfair revises earnings in trading update
Paddy Power Betfair has published its interim trading results for the first half (H1) of 2018, revising its full-year earnings.
The group’s trading update posted a revised full-year underlying EBITDA figure of between £460m and £480m.
The revision relates to a downturn in recent trading momentum and additional taxes that were introduced in Australia earlier in the year.
However, most influential was the losses incurred from the FanDuel fantasy betting site, which the group acquired in May. Weak horse-racing revenues for the period also contributed.
Share prices fell on the morning of the announcement, with the group the biggest faller of any FTSE 100 company.
Despite the revised earnings, chief executive of Paddy Power Betfair, Peter Jackson, was positive, saying:
It has been a busy and successful few months for Paddy Power Betfair. We have made substantial progress against our strategic priorities and trading in Q2 was good, with all brands and operating divisions contributing to the Group’s double-digit revenue growth. We now have much better visibility of the regulatory and fiscal changes in the UK, Australia and the USA, and believe that our scale, leading customer propositions and strong balance sheet mean we are well positioned to build a business that can generate sustainable shareholder returns over the long term.– Peter Jackson, Paddy Power Betfair chief executive
Revenue for the first half of 2018 was £867m, up 7% on the year, while revenue for quarter two (Q2) of 2018 was up in all operating divisions.
Online revenues rose by 13% in total, with a 12% and 14% rise in sports and gaming respectively. Retail revenues were up by 6%, while revenues in Australia grew by 19% and in the USA by 20%.
Strategic and operational highlights included strong growth for the Paddy Power brand and investment in marketing and customer value by utilising Sportsbet.
The combination in the US of Betfair US and FanDuel will also allow the group to exploit the newly opened US market, meaning growth in that division is on the horizon. Towards that goal, the group also entered into an agreement with Boyd Gaming, which will see FanDuel gain market access in several US states.