Paddy Power H1: online strong, but group profit down 26%

PADDY POWER’S operating profit has fallen by more than a quarter on the same period in 2008 despite growth in its online division, the Irish bookmaker’s half-year results reveal.

The figures, published today, show a 26% decrease in operating profit to €33.5m for the period to June 30 from the same point last year, which chief executive Patrick Kennedy attributed to “a swing in the year-on-year run of sporting results [which is] a normal occupational hazard for bookmakers,” adding that he has “happy with the strong underlying performance.”

Growth accelerated in its online division, which is responsible for two-thirds of group profit, with a 23% rise in the amounts staked by customers, and a 20% jump in active customers. Overall the number of sportsbook customers and their average bets grew 20% and 50%, although the average stake per bet fell by 11%.

Ireland’s biggest bookmaker said that it remained on track to meet its full-year profit target, and that strong growth in the amounts being staked by customers and the Irish government’s decision to postpone the introduction of a 2% betting tax would offset the impact of the punter-friendly sporting outcomes.

“It’s been a great start to the year for punters and a positive start to 2009 for Paddy Power,” Kennedy said in a statement

While welcoming the Irish government’s decision to postpone the planned doubling of betting tax to 2%, Paddy Power warned that a potential taxation on online and telephone betting would be difficult to successfully implement.

Paddy Power was hit hard by Irish rugby’s most successful season ever, as well as by good results for the ‘big four’ English Premier League clubs and by a run of wins by favourites at the Cheltenham horse racing festival.

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