Bookmaker, Paddy Power, said this morning it was on track to meet its full-year profit target after suffering a substantial dip in the first half on a run of unfavourable sports results.
The group said strong growth in the amounts being staked by customers and the Government's decision to postpone the introduction of a 2 per cent betting tax would offset the impact of the punter-friendly sporting outcomes.
The Dublin-based bookmaker forecast it would meet market consensus for 2009 adjusted diluted EPS of around 111 cents - down from 140.5 cents last year - and increased its interim dividend by 5 per cent to 19.5 cent per share.
British rival Ladbrokes cut its interim dividend earlier this month while Britain's biggest bookmaker, William Hill, warned full-year profits would be below expectations.
"It's been a great start to the year for punters and a positive start to 2009 for Paddy Power," chief executive Patrick Kennedy said in a statement
"A swing in the year-on-year run of sporting results, a normal occupational hazard for bookmakers, has driven a reduction in our operating profit in the period but we're happy with the strong underlying performance."
Operating profit fell by 26 per cent to €33.5 million for the period to June 30th on the back of unwelcome results on the field of play.
Compared to what it described as bonanza sporting results this time last year, Paddy Power was hit hard by Irish rugby's most successful season ever, a consistent showing by the English Premier League's 'big four' clubs and jockey Ruby Walsh's record seven winners at the Cheltenham horse racing festival.
"After eight Irish-trained winners over the first two days we were considering going to the government for a bailout, but we knew they had no money left," the bookmaker said of its torrid time at the famous festival.
Paddy Power said it increased market share across all divisions in the period, gaining 3 per cent to hold 29 per cent of Irish retail while it opened 15 shops in the UK to move beyond 80 and remain on target to have at least 150 units by 2011.
It also saw growth accelerate in its online division - responsible for two-thirds of group profit - with a 23 per cent rise in the amounts staked by customers and a 20 per cent jump in active customers pushing operating profit slightly up.
Overall the number of sportsbook customers and their average bets grew 20 per cent and 50 per cent but the average stake per bet fell by 11 per cent.
Bookmakers have historically been regarded as less vulnerable than many other businesses to a recession.
While welcoming the Irish government's decision to postpone the planned doubling of betting tax to 2 per cent, Paddy Power warned that a potential taxation on online and telephone betting would be difficult to fairly and successfully implement.
Reuters