SHARES IN Irish bookmaker Paddy Power rose by 5.7 per cent in Dublin yesterday as the company released a bullish trading statement and announced the acquisition of a gaming software company in Bulgaria.
The Irish company said the “strong growth” that it experienced in the first half of 2011 continued into the trading period from July 1st to November 14th.
Its UK and Irish online business – paddypower.com – increased its sportsbook amounts staked by 31 per cent and its gaming/B2B revenues by 33 per cent.
Australian online turnover growth accelerated – up 23 per cent as compared to 7 per cent in the first half of 2011.
Paddy Power said this was the result of investment by the company, including the migration to a new operating platform, increased recruitment and new mobile product.
Its bookmaking shops in the UK continued to perform strongly. Its like-for-like sportsbook amounts staked and machine gaming revenue were both up 8 per cent. Some 40 new shops are expected to open there in 2011.
In Ireland, the company experienced growth in bet volumes but a reduction in the average stake per bet. This reflected reduced consumer spending in the recession.
“It continues to be very tough,” Paddy Power chief executive Patrick Kennedy told The Irish Times yesterday. “Irish retail was the only negative figure on the page.”
He said the average stake per bet is down 30 per cent in the past four years in Irish retail.
Paddy Power expects to achieve underlying diluted earnings per share growth in 2011 of 15-20 per cent versus 2010.
Stockbroker Davy yesterday upgraded its earnings forecast for Paddy Power.
“We had been forecasting eps for 2011 of 202 cent (consensus 194 cent). We are likely to tweak up our year-end forecast by 2 per cent to 206 cent. For next year, we are likely to increase our eps forecast by 1 per cent to 234 cent,” analyst David Jennings said.
Davy also forecast that Paddy Power’s UK shops would be more profitable this year than the Irish ones, something that was unthinkable in the Celtic Tiger years.
Separately, Paddy Power has acquired CT Networks Limited, a games developer headquartered in the Isle of Man but located in Sofia.
The acquisition price was not disclosed but said the local management team would remain in place.
Mr Kennedy described the deal as “strategically very interesting”, giving the Irish company its own proprietary e-gaming product and access to a “deep pool of software talent in Bulgaria”.
The Bulgarian company has 35 staff and will develop a range of online games for Paddy Power, including blackjack and roulette.
