Sportsbook drives Paddy Power Betfair online revenues up 15%
Total Q1 revenues hit £224m although gaming arm continues to perform “below expectations” following minimal growth
Paddy Power Betfair this morning reported a 15% jump in Q1 online revenues as improving sportsbook stakes and margins overcame a stagnant gaming vertical.
Group online revenues hit £224m, with sports revenues (including the Exchange) up 21% year-on-year to £163m and gaming up 2% to £61m.
Sportsbook alone grew 33% following a 9% rise in stakes, and improved sporting results as margin climbed by 1.3pp to 6.7% – although the firm said margin was below expectations.
“Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth,” said group CEO Breon Corcoran.
“Since then, however, at high profile events such as the Grand National, Premier League football and the US Masters, results favoured customers, and overall gross win margins were weak in April.”
At this year’s Cheltenham Festival, PPB said 19 of the 28 races were profitable compared with just 11 races in 2016.
On gaming, which was identified as an area of focus in March’s FY16 results, the firm added: “We are continuing to focus on improving the performance of our gaming products, but currently revenue remains below expectations.”
Underlying EBITDA for the entire group climbed 87% to £111m thanks to the impact of merger-related cost savings and efficiencies.
In Australia, the group’s Sportsbet brand continued its recent progress, growing 21% in local currency to £85m, despite a reduced contribution from in-play betting, which represented 8% of stakes in the quarter versus 14% in the prior year.
In the US, revenue was up 12% in local currency to £25m, with horseracing operator TVG revenues up 5% and the Betfair New Jersey Casino up 68%.
PPB shares were down 1.5% to 8,640p in early trading.