Gambling operator Paddy Power Betfair today posted a trading update for the three months and the year ended December 31, 2016. The company highlighted revenue increase despite bettor-friendly results and certain “weakness” in its online gaming performance during the fourth quarter of the year.
Revenue for the three months ended December 31, 2016 totaled £388 million, up 10% from the same period a year earlier. Sports betting revenue amounted to £299 million, reflecting a 12% increase year-on-year. According to the figures posted, Paddy Power Betfair generated gaming revenue of £89 million during the reported three months.
Full-year revenue amounted to £1.551 billion, representing an 18% growth from a year earlier. Sports betting revenue accounted for the greater portion of the whole. It totaled £1.198 billion in 2016, up 19% from the previous year. Gaming operations contributed the total amount of £353 million during the reviewed 12 months.
Paddy Power Betfair said in its latest trading update that it expects full-year EBITDA to meet original forecasts of between £390-£405 million, despite the lower-than-expected gross win margins reported for November and December.
The gambling operator pointed out that sportsbook staking continued growing during the fourth quarter of the year, but as mentioned above results were more customer-friendly during the period. Paddy Power Betfair revealed that Donald Trump’s election as US President cost it almost £5 million. Unfriendly football results in December also had a negative impact on the group’s overall performance. However, the unfavorable effects were to a certain extent offset by lowered marketing costs.
Paddy Power Betfair’s online division reported poorer-than-expected results for its online division. Revenue from the business slid 3% during the fourth quarter of the year, despite increased sports betting stakes. Being present in multiple jurisdictions, including non-European ones, the operator was able to offset the losses. It hailed the performance of its Australian Sportsbet brand, which saw a 25% growth in sportsbook stakes and an 18% increase in revenue during the three months ended December 31, 2016.
Since the completion of the merger between the former Paddy Power and Betfair operators last February, the combined entity has been managing four divisions – an online one with operations across Europe, an Australian one with the above-mentioned Sportsbet brand, a US one with the Betfair Casino and Betfair New Jersey Exchange brands, among others, and a retail one with 600 Paddy Power-branded betting shops across the United Kingdom and Ireland.
