Paddy Power's has again proved that bookmakers always win. Power Leisure, the company that owns the bookmakers, yesterday reported an 18 per cent rise in profits from £2.19 million in 1995 to £2.58 million last year, despite saying it was making less money from horse racing.

Managing director, Mr Stewart Kenny, said its margins from horse racing betting had been "particularly thin" last year, forcing the group increasingly to diversify into non-racing betting.

"The reality is that the betting business has changed irrevocably and that bookmakers need to adapt to that change if we are to remain competitive" according to Mr Kenny.

The bookmaker's "Lucky Numbers" Lotto-type game failed to perform particularly strongly last year, he said, blaming an extraordinary sequence of favourable results for horse racing punters at the Cheltenham and Aintree festivals for weaker sales.

Mr Kenny added that the numbers playing its Lucky Numbers game in the current year have risen again, shown signs of some improvement in the current year.

"We are currently considering ways of reviving our numbers betting in order to enhance customer appeal and to stem any further slippage in the face of new competition."

The 1996 figures show an 18.6 per cent rise in the group's turnover for the 12-month period, rising from £87.69 million in 1995 to £104.04 million.

Taxes and duties paid to the Exchequer also increased to £13.2 million, up 15.4 per cent on the previous 12 months.

Mr Stewart said the group now intended to expand its presence in the Irish market with a view to growing its market share to more than 25 per cent.