Paddy Power Betfair Reports 20% Rise In H1 US Revenues

Paddy Power Betfair has released first-half figures, showing a dramatic 20% rise in US revenues, and 7% overall.

Paddy Power Betfair plc, the Anglo-Irish betting giant has reported an impressive 20% rise in US revenues for the six months up to 30th June 2018 – consisting of a 12% growth in sports revenue and 8% in gaming.

Financial Highlights

  • H1 revenue up 7%, with Q1 flat and Q2 up 13% (up 9% in period pre-World Cup)
  • Good Q2 revenue growth in all operating divisions:
    • Online: revenue up 13% (with sports +12% and gaming +14%)
    • Australia: revenue up 19%
    • Retail: revenue up 6%
    • USA: revenue up 20%
  • H1 underlying1 EBITDA2 up 1% to £217m, or up 6% excluding changes in betting taxes & levies and losses in DRAFT (Q1 flat, Q2 up 13%)
  • Net cash of £148m at 30 June; £201m returned to shareholders via dividends & share buybacks in H1

Strategic and operational highlights:

  • Good progress on returning the Paddy Power brand to growth
  • Sportsbet using scale advantage to increase investment in marketing and customer value to further enhance its leadership position ahead of potentially disruptive tax changes
  • Combination of Betfair US with FanDuel completed in July, creating a unique platform to address the nascent US sports betting market opportunity

Outlook:

  • Full year 2018 underlying EBITDA, pre-US sports betting, now expected to be between £460m and £480m, reflecting recent trading momentum, the introduction of additional taxes in Australia and the inclusion of losses from the FanDuel daily fantasy sports business

As one of the big European players looking to capitalise on the post-PASPA environment in the USA, PaddyPower Betfair  have stated that their priorities are now to continue their fantasy sports and horseracing growth while scaling up sports betting in key states as opportunities present themselves.

Chief Executive Peter Jackson told investors:

“It has been a busy and successful few months for Paddy Power Betfair. We have made substantial progress against our strategic priorities and trading in Q2 was good, with all brands and operating divisions contributing to the Group’s double-digit revenue growth.

“In the USA, we were delighted to add FanDuel to the group’s portfolio of leading sports brands, creating the industry’s largest online business, with a large sports-focused customer base and an extensive nationwide footprint. Our FanDuel sportsbook is now available in New Jersey and with our recent partnership with Boyd Gaming we’re looking forward to launching in further states as the legislation progresses.

“We now have much better visibility of the regulatory and fiscal changes in the UK, Australia and the USA, and believe that our scale, leading customer propositions and strong balance sheet mean we are well positioned to build a business that can generate sustainable shareholder returns over the long term.”

(Photo: ©PaddyPowerBetFair)

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