Paddy Power to wager €6m on Italy

LISTED bookmaker Paddy Power estimates its planned expansion into Italy will cost the group around €6 million this year.

The group yesterday said net revenues in 2011 grew 17 per cent to €499 million, from €427 million the previous year.

Pre-tax profit increased more or less in tandem, rising 16 per cent to €121.2 million last year from €104.2 million in 2011.

The bookmaker said yesterday it is planning to expand into the Italian market this year, and already has teams in place both here and there.

Paddy Power intends to launch an internet betting site there, beginning with sports betting and stepping up over the year into casino games and online poker.

Peter O’Donovan, managing director of the group’s online and technology operations, calculated yesterday the move will cost around €6 million this year.

Chief executive Patrick Kennedy said Paddy Power has been working on the plan for the last 15 months. Italy is Europe’s biggest gambling market and the rate at which consumers are adapting to internet and mobile technology is gathering momentum.

Mr O’Donovan said yesterday the internet betting market there was “immature and growing”. Initial soundings show Paddy Power’s brand has some recognition there already, as local media have picked up on money-back specials and other marketing initiatives.

Its tongue-in-cheek values are also likely to play well there, according to Mr O’Donovan, who said the company has had “very strong, positive feedback” to the brand.

Paddy Power hopes to report further progress on its licence application in the US state of Nevada in the near future. It applied to the state’s gaming commission for an internet gaming licence in the second half of last year but expects the overall process to take more than 12 months to complete.

The figures released yesterday show its combined internet businesses, Paddypower.comin Ireland and Britain, and Sportsbet in Australia, accounted for €306 million of its net revenues in 2011, 25 per cent more than the €247 million that they contributed in 2010.

The two accounted for €97 million of its €119.5 million operating profits, more than 25 per cent ahead of the €77 million operating surplus that they generated in 2010.

The company is paying a final dividend of €1 a share to its investors, a 33 per cent increase on last year.

By The Numbers: Paddy Power Results

RESULTS FOR YEAR ENDED

December 31st, 2011 (change from last year)

EARNINGS PER SHARE

212.3 cent (+26%)

PRE TAX PROFIT

€121.2m( +16%)

TOTAL 2011 DIVIDEND

100 cent (+33%)