Profits boost for Paddy Power
Bookmaker Paddy Power’s advertising antics during this summer’s Euro 2012 football tournament were today rewarded with a 21% hike in half-year profits.
The bookie took €78m in bets on Euro 2012 alone, helped by PR stunts such as its 100ft high statue modelled on Rio de Janeiro’s Christ the Redeemer with England manager Roy Hodgson’s face.
It also responded to Uefa’s banning of vuvuzelas by building a giant working ’vuvutruck’ and drew more media coverage when the Denmark striker Nicklas Bendtner revealed the logo of the company on his pants while celebrating a goal in a group game.
The company said: “Every two years a major football tournament presents a great opportunity to showcase the Paddy Power offer, which we fully exploited during Euro 2012.”
Pre-tax profits rose to €68.7m in the six months to June 30, up from €56.2m a year earlier.
The improvement came despite €5.6m of money-back refunds on just four events, including Chelsea lifting the Champions’ League trophy and England versus Italy going to penalties.
It also said it took a results “drubbing” in May, but blamed the hit on short-term volatility and said sports results were better than it would normally expect overall in the first half.
Like-for-like sales across its 185-strong UK retail estate grew 10%, but the amount left by losing punters rose by a more muted 0.3% to 10.8% against a 1.7% rise in Ireland to 12.2% as the UK shops saw a less favourable Euro 2012.
Growth in online bets lifted internet earnings by 1% in constant currency terms to €48.5m – nearly three quarters of group profits.
The group said it gained €6.1m in gross win during the Euro 2012 tournament, but that operating profits growth would have been ``marginal'' given the money spent on marketing the Paddy Power brand.
Paddy continued to invest in its online business, launching into the Italian online market in May – where it said it had already achieved a 4% share of the online sports betting market.
It is also tapping further into demand for smartphone-based betting, with mobile games now accounting for a fifth of total games revenue.
The group’s online offering in Australia was another driver of growth in the half-year, reporting earnings up 24% in constant currency to €13.2m.
Despite the growth of its mobile and internet ventures, Paddy is continuing to expand its betting shop presence, opening another 20 UK shops in the first half and aiming for up to 40 in the full year.
