Sporting upsets such as the Greek soccer team's Euro 2004 victory saw bookmaker Paddy Power's pre-tax profits rise 158 per cent for the first half of this year.

The company released interim results yesterday, which showed that, for the six months to the end of June, turnover grew 22 per cent to €554.1 million, up from €453.4 million during the same period in 2003.

Operating profit grew 168 per cent to €18.2 million from €6.8 million in the first six months of 2003. Interest income of €500,000 left the company with first-half pre-tax earnings of €18.7 million, 158 per cent ahead of last year's gain of €7.2 million.

The rapid profit growth was mainly attributable to a run of bad luck for punters - namely large numbers of favourites losing races at big meetings such as Cheltenham, and upsets like rank outsiders Greece winning the European Championship.

Finance director Mr Ross Ivers pointed out yesterday that the results contrasted heavily with the situation in the first half of 2003, when an unprecedented 10 favourites scored at Cheltenham, and Irish bred and trained Monty's Pass landed a massive gamble when he won the Grand National at Aintree.

Those results prompted the company to warn the markets that its margins would be at the lower end of the 12-14 per cent range. However, Mr Ivers said yesterday that Paddy Power was not betting on the punters' bad run of luck continuing.

"It's just the vagaries of the business we're in," he said. "It's like tossing a coin, you could get five heads in a row or five tails in a row but . . . it averages out."

The company's gross win for the period was €72.2 million, compared with €42.6 million in 2003. Paddy Power recorded an interim gross profit of €66 million for 2004 and €40.1 million for 2003.

Mr Ivers explained that the difference between the gross win and gross profit figures is explained by the fact that it pays gross win tax on its UK operations and, since February, is absorbing a 3 per cent combined betting tax and broadcast rights charge in 58 of its 141 Irish outlets.

These levies cost it €6.2 million this year, against €2.5 million last year. The increase was partly due to the fact that its gross win liability in the UK increased and partly because it had begun absorbing the 3 per cent levy in 40 per cent of its Irish outlets.

First-half earnings per share grew 154 per cent to 33.3 cents, from 13.1 cents in 2003, and the company declared an interim dividend of 6.2 cents, a 44 per cent increase on last year's dividend.

Chief executive Mr John O'Reilly said that the company was beginning to see payback from its investment in online and internet betting.