Group revenue at bookmaker Paddy Power Betfair rose 18 per cent last year to £1.55 billion (€1.79 billion), despite a myriad of big bets that favoured customers in the fourth quarter.
The group said it expects underlying ebitda to be around the mid-point of the previously guided range of £390 million to £405 million, nowithstanding worse-than-expected gross win margins in November and December.
The group said fourth quarter betting results generally favoured customers, starting with the US election outcome, which cost the bookmaker almost £5 million. It also lost money on football bets in December.
“We estimate that the impact on group revenue from the customer friendly results, before any benefit from the re-cycling of winnings, was approximately £40 million in the quarter. The impact on profitability of these results was partially offset by lower than expected marketing and staff costs,” it said.
Revenues were down 3 per cent year-on-year for the group’s online division, despite a 15 per cent growth in sportsbook stakes.
The group said its Australian division saw 25 per cent growth in sportsbet stakes and 18 per cent in revenue, which partially offset the poor gross win margin in its European businesses.
In a note to investors, Goodbody reiterated its buy recommendation for the group.
“Overall this is good update from Paddy Power Betfair. Despite the £40million negative impact from sporting results towards the end of the year the group has still come in broadly in line with expectations. This is again a reflection of the strong operational leverage in the model,” said analyst Gavin Kelleher.
