Paddy Power Betfair Plc this morning reported their first half earnings results for 2016. Figures in revenue growth look encouraging and progression of the merger integration between Paddy Power and Betfair is ahead of schedule.
The company also revealed that Stewart Kenny will be stepping down from his role as Non-Executive Director on the company’s board.
Revenues up 18% in H1
The bookmaker reported that revenue in the first half of 2016 stood at £759 million, up 18% compared to the same period the previous year.
Revenue from online operations increased to £440 million, up 20%, with sportsbook stakes matching this growth rate.
Sportsbook stakes in Australia where up a full 30%, with revenue from operations in the country increasing 17%, to £129 million.
Retail revenue over the period grew by 12%, compared to H1 in 2015, to stand at £147 million.
Paddy Power Betfair Plc also stated that second quarter revenues grew by as much as 20% to £420 million, helped by a strong performance throughout the Euro Cup.
With an interim dividend of 40 pence per share, total dividends for the first half now stand at 52 pence per share.
Merger integration will be completed ahead of schedule
Further, the company was happy to report that the merger integration of Paddy Power and Betfair has been progressing ahead of its schedule. The bookmaker assumes £65 million in operating costs savings from the merger, achieving full benefit by 2017. This is a full year earlier than previously expected.
The £7 billion merger between Paddy Power, an Irish bookmaker and Betfair, the world’s largest online betting exchange, was concluded in February this year. The company first seemed to suffer under the cost of the merger and share prices dropped considerably in late February and the first half of March.
Breon Corcoran, Chief Executive, commented on the success in the integration of the two companies:
“Paddy Power Betfair has sustained good momentum through a period of considerable change […] We are creating a world-class operation by exploiting the unique assets and capabilities of each legacy business, particularly in the key functions of technology, marketing and trading.”
Steward Kenny announces he will be stepping down
The earnings report was joined by another announcement by the company, notifying that Stewart Kenny will be stepping down from his position as Non-Executive Director on the Board.
Steward was one of the co-founders of Paddy Power and the company’s CEO unitl 2002. After a period as chairman, he remained on the board as non-executive director for 13 years.
Gary McGann, Chairman of Paddy Power Betfair commented on Kenny’s decision to leave the board:
“After 40 years in bookmaking and 28 years’ involvement with this business, Stewart has an enviable record in the industry and leaves a great legacy. He was instrumental in creating a highly successful international business from a small domestically-focussed retail operation at inception. Stewart, more than anyone, positively influenced the culture of the business. He played a hugely supportive role in the merger of Paddy Power with Betfair. He is retiring after many years of enormous service to the Company and the industry. We wish him every success in the future and thank him for his incredible contribution to this business.”
Paddy Power Betfair Plc shares struggle
Paddy Power Betfair Plc (LON: PPB) shares gained greatly, to a new six-month high of 9,995 pence, in Tuesday afternoon trading.
However, today’s news has not helped this rally to continue.
After a short period of upwards movement just after market open, the share price began to drop, losing all of its gains from the previous day.
At 11:58 shares were trading at 9,775 pence (-1.76%).
Katharina Fleiner 24/08/2016
