Paddy Power Betfair Q1 revenues up 17% as US and Australia lead positive returns
European Online business continues to stutter thanks in part to adverse sporting results
Paddy Power Betfair has reported a 17% year-on-year rise in its revenues for the first quarter of 2018, with revenues topping £478m.
Total online revenues fell 1%, excluding the Adjarabet acquisition, to £228m, thanks to a 6% fall in online sports betting revenues, which fell to £152m.
PPB said this decline was due to unfavourable sports results, primarily February racing and March football.
The decline in sports revenues was offset by a 14% like-for-like increase in online gaming revenues, which rose to £76m.
Paddy Power Betfair CEO Peter Jackson said there was good “underlying momentum” for the operator, highlighting the geographical diversification of its online business.
The group share price was down some 4.5% in early trading.
US revenues proved to be the big winner for PPB during the quarter, with proforma Q1 online gaming revenues rising by 83% y-o-y to $9m. Sports betting revenues in the US business also rose by double-digits during the quarter, rising 43% y-o-y to $69m.
PPB highlighted its FanDuel business, which holds a 50% market share in the New Jersey market.
“We remain on track to meet our full year profit expectations despite the adverse sports results in Q1. We remain excited about the growth opportunities that lie ahead for the Group.” Jackson added.
PPB’s Australian division, which includes Sportsbet, reported a 20% y-o-y spike in revenues during Q1, with revenues rising to A$96m. This increase was driven by “continued good underlying customer activity” with 17% growth in bets made during the period.
Group retail revenues fell by 2% during the first quarter of 2019 to £77m, a fall which occurred thanks to a 5% drop in sports betting revenues which offset a 2% spike in machine gaming revenues.
Analysts Regulus Partners said PPB’s overall revenue growth “demonstrates the benefits of diversification and strong multi-product execution in the US” highlighting the New Jersey market as being in a position to be “uniquely successful for some time”.
However, Regulus believes that PPB’s key task is to “sustainably grow” the mass market gambling segment in its UK and Ireland markets, something which the analyst said is “not yet visibly and consistently occurring”.