Paddy Power said yesterday that turnover in the year to date was up by a quarter and it was on course to meet market expectations for the year.

The bookmaker said revenue was 25 per cent higher in the 19 weeks to May 9th than in the same period a year earlier, driven by a particularly strong performance from its online channel, in particular gaming revenues such as poker.

While turnover from the company's chain of betting shops rose by 19 per cent and telephone betting sales were up by 18 per cent, revenue from its online business surged by 44 per cent, excluding gaming. Gaming revenues jumped by 27 per cent, boosted by the addition of poker revenue.

Chief executive Patrick Kennedy said the company's gross win percentage in the period was marginally below the mid-point of the guided range of 11-13 per cent. However, the bookmaker said operating costs were around one-third higher than in the same period of 2005 as the company invested for future growth.

Among the reasons behind the increase in costs was the growth in the number of retail outlets as the company opened three new outlets in the Republic and four in the UK. It aims to open a further 6-10 outlets in Ireland this year and up to 15 in Britain.

Asked by one shareholder whether the company would use some its cash to pay a special dividend, Mr Kennedy said he wouldn't "rule anything out". However, he said the company remained focused on growth, particularly expansion of its UK retail business which it believes could pick up pace depending on the outcome of deregulation in the British market.

Paddy Power is also interested in expanding its online channel. It launched "reverse" auctions in January, a German language online sportsbook in April and plans to launch an online bingo business during the summer.

Mr Kennedy said it would also consider making acquisitions in the online business. Shares in the bookmaker, which have outperformed their sector of late, closed 10 cent lower yesterday at €14.30 following some profit-taking.