Paddy Power shares were marked down yesterday as UK rival Stanley Leisure issued a profit warning and analysts said the leading Irish bookmaker was unlikely to escape the recent run of adverse horse-racing results.

Shares in Paddy Power closed 3.6 per cent lower at €5.40, having been down as much as 6 per cent, after the British bookmaker said its betting division had suffered from a series of unfavourable horse-racing results, including at the Cheltenham Festival and the Doncaster Lincoln meetings.

Favourites won 10 of the 20 races at this year's Cheltenham, which was widely regarded as a punters' race meeting rather than a bookmakers. It was the first time since 1971, when eight of the races were won by the leading contenders, that favourites enjoyed such a haul.

Stanley Leisure also noted that, while the Grand National outcome in Britain was similar to last year, this was not the case in Northern Ireland and the Republic.

"The combination of these circumstances has depressed profitability," Stanley said, adding it still expected to report profits ahead of last year but short of consensus estimates.

Stanley Leisure is the second bookmaker to warn that recent horse-racing results have hit profitability. In late March, Sportingbet said its March performance was below the usual, due to the high number of results unfavourable to bookmakers. It cited British horse-racing and US basketball in particular.

Analysts said they did not expect Paddy Power to remain immune to industry trends. Indeed, given that the Grand National was won by an Irish horse, Monty's Pass, the result may have been more negative for Irish bookmakers.

"While this suggests that earnings this year may fall shy of our 37.4 cent estimate, trends in sporting results are a function of chance and consequently we would see this decidedly as a short-term issue," Merrion analyst Ms Niamh Brodie said.

Davy analyst Mr Stephen Furlong agreed that, while the bad run of results for bookmakers might have an impact on Paddy Power's first-half figures, its long-term impact would be limited. He noted the bookmaker, which is very much focused on the smaller punter, was likely to offset any weakness in the first half with conservative management of its book in the second half and he is sticking with his full-year earnings forecast of 39.3 cents per share.

A Paddy Power spokesman declined to comment on competitor activity.

With regard to the trading environment, he said the next scheduled update would be given at the annual meeting in June.