Paddy Power raised its full-year profit forecast yesterday, saying it is now on track to record a 36 per cent increase in operating profit this year following a series of favourable sporting results.
In a statement to the stock exchange, the listed betting company said the strong start to the year which was mentioned at the group's agm in May has continued, and that as a result it expects operating profit of €62 million for the full year. This is a 36 per cent increase over 2006 and up from the €58 million the company forecast at its agm.
"Assuming the favourable sporting results in the first half are not offset by an unfavourable run in the second half, and that the group turnover continues to grow in line with our forecasts, we expect operating profit of approximately €62 million," the company said.
Results that are favourable to Paddy Power are those when the bookmaker's favourite wins, meaning the odds are narrower and less money has to be paid out.
In the statement, Paddy Power said sporting results had been particularly favourable in the last three weeks, including a record result at the Royal Ascot race meeting.
Paddy Power also said the first-half had in the past tended to be stronger for the group, and this would be "particularly pronounced" this year.
Analysts welcomed the upgrade, with Cillian McNally, an analyst at NCB, describing the performance as impressive. "Overall, things are going well for Paddy Power," he said in a note to investors.
"While the group is benefiting from favourable sports results in the first half, the underlying growth momentum remains impressive."
Meanwhile, Goodbody analyst Eamonn Hughes raised his full-year operating profit forecast by 3 per cent to €64 million and increased his price target for the stock from €24 to €24.80, a 9 per cent premium on Wednesday's closing price.
Yesterday the shares rose as much as 2 per cent, before dropping back to close down 0.3 per cent, or 7 cents lower, at €22.78. However, dealers dismissed the declines, saying they were not a true reflection of the news.
