PP shares avoid Cheltenham hurdle

By Pádraig Hoare It may have largely been a Cheltenham week to forget for bookmakers but the punter-friendly results have not led to a fall for industry leaders like Paddy Power.

Shares in Paddy Power were largely unchanged as it navigated the hurdles that the four-day festival posed.

Despite fellow bookmaker Ladbrokes claiming day one of Cheltenham was the costliest ever for bookmakers with a loss of €25m, it was unlikely to have an impact on overall financial results of firms, according to analysts.

Industry insiders said that despite the high-profile payouts of day one and other punter-friendly results on day two and three, it could yet end up in a photo finish between bookmakers and punters overall after a positive fourth day for the betting firms.

Ivor Jones of Peel Hunt said the effects of Cheltenham on the likes of Paddy Power’s financial results were negligible.

“Cheltenham is high-profile but marginal, if the punters do well in one period they have more money to bet in the next period, and of course, vice versa. The World Cup is another important event later in the year,” he said.

Mr Jones said boardroom movement including chief executive Breon Corcoran leaving his role to be replaced by Peter Jackson, stalled product development and losing market share were more important factors than Cheltenham when it came to Paddy Power’s share price.

Shares in the €7.35bn-valued firm fell last week amid investor concern over its performance in mainland Europe.

Paddy Power, which has a market share of around 29% in the UK and Ireland, spent around €28m on marketing last year and has indicated it will spend a further €22m to regain lost market share.

Overall group revenues rose 13% last year to over €1.94bn, according to annual results.

UK rival Ladbrokes said day two of Cheltenham was very costly for the industry with Irish winners dominating proceedings, while the third day was also punter-friendly with favourites finishing on the podium.

The winner of yesterday’s Gold Cup, Native River, was a “nightmare result” for bookmakers, according to Ladbrokes’ Nicola McGeady.

Shares in Ladbrokes were up more than 1.5%, while fellow UK firm William Hill were up 0.5%.

Independent Irish bookmaker Boylesports, which has a market share in the Republic of around 25%, said it had a record year in terms of bets placed with mobile customers, online and in shops.

A spokesman said: “For bookmakers it was a positive experience but well off the dizzying heights of last year.”

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