Winning punters dent Paddy Power's profit

The larger-than-life bookie blamed a string of 'punter-friendly' sports results for missing double-digit profit growth this year.

by Andrew Saunders
Last Updated: 01 Mar 2016

Andy Murray winning Wimbledon, Phil Mickelson’s victory at the British Open, The Melbourne Cup being won by the favourite for the first time since 2005.  The kind of results that sports fans dream of, but which give bookmakers like Paddy Power - who have to pay out on all those bets - nightmares.

Thus it was, said the London-listed Irish firm in its results this morning, that for the year to December 2013 profits rose ‘only’ 5% to 141m Euros on constant-currency revenues up 17% to 745m Euros. And although by the standards of some of their high street rivals this looks pretty good, investors have clearly come to expect more from the London-listed Irish firm, and share fell nearly 2% in early trading.

Paddy Power - which is establishing something of a name for itself as the new Ryanair when it comes to near-the-knuckle advertising - has also come under criticism for its latest marketing wheeze.  It ran an ad saying that anyone who has bet that the Oscar Pistorius murder trial will end up with him going to jail, will be given a refund in the event that he goes free.

But despite a year in which, as the result announcement put it, ‘Sports results went backwards and forwards like a naked Miley Cyrus on a wrecking ball’ chief exec Patrick Kennedy has much to be pleased about.

Not least the fact that revenues from mobile transactions rose 73% to account for three-quarters of earnings, making Paddy Power one of the gambling business's few traditional players to be handling the switch to digital with aplomb.  






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