Gambling operator Paddy Power Betfair plc announced today its financial results for the three months ended March 31, 2016. Paddy Power and Betfair completed their merger on February 2, 2016. The merged entity said that the posted results have been prepared as if the two companies have always been a single business.
Revenue amounted to £339 million, up 16% as compared to the figure posted for the same period a year ago. Paddy Power Betfair pointed out that revenue in both this year’s and last year’s first quarter was impacted by unfavorable sports results, particularly during the 2016 edition of the Cheltenham Festival. It is also important to note that revenue from regulated markets accounted for 95% of the overall revenue posted for the period in review.
Revenue from online operations was up 17% year-on-year to reach £195 million. Proceeds from regulated markets increased 21% year-on-year. Revenue from unregulated markets dropped 14% year-on-year, mainly due to Betfair’s exit from Portugal in July 2015.
Revenue from sports betting operations totaled £135 million, up 17% as compared to the figure posted for the three months ended March 31, 2015. The rise was attributed to an increase in sportsbook stakes as well as to a growth in revenue generated by Exchange and B2B operations. Mobile was also an important driver of the overall sportsbook growth. It accounted for 76% of all the revenue generated during the period.
Proceeds from online gaming options amounted to £60 million, up 17% year-on-year. The increase was attributed to strong performance of Paddy Power Betfair’s mobile segment. Revenue from mobile casino games increased 43% over the period in review and accounted for 56% of the overall gaming revenue.
As for Paddy Power Betfair’s Australian business, the company said that it kept on growing strongly and taking a bigger share in the local market. Revenue from the division totaled £58 million, up 25% as compared to the figures posted for the same period a year ago.
Revenue in the US increased £22% to £20 million. Earlier this year, Betfair US was granted a license to operate a horse racing exchange wagering platform in New Jersey. It will introduce its product to local customers on May 10.
Revenue from Paddy Power Betfair’s retail operations was up 5% year-on-year to £67 million. Revenue from sportsbook increased 3% and machine gaming grew 8% year-on-year.
Group EBITDA was up 27% year-on-year to £59 million. Operating profit increased 36% to reach £43 million. Sales and marketing spend increased by £13 million over the period in review and new taxes and product fees rose by £3 million, mainly due to the point of consumption tax and the machine gaming duty.
Commenting on the posted financial results, Paddy Power Betfair CEO Breon Corcoran said that all four brands – Paddy Power, Betfair, TVG, and Sportsbet – are trading well in the extremely competitive environment. He also noted that they will now focus their marketing, technology, and operations on preparing for the upcoming UEFA Euro 2016.
Mr. Corcoran pointed out that the ongoing post-merger integration is going on track and that the business’s restructuring has begun.
