Paddy Power Betfair posts interim results
News on 8 Aug 2017
News on 8 Aug 2017
On the heels of yesterday’s announcement that CEO Breon Corcoran is to step down later this year (see previous report) Paddy Power Betfair has released its 2017 interim results, reporting improved revenues but higher promotional and pricing investment.
Highlights of the H1-2017 report include revenue up 9 percent year-on-year to GBP 827 million, driven by good stakes growth, with online especially strong, up 10 percent. Underlying EBITDA was up 21 percent to GBP 220 million, with EBITDA margin up 3 percentage points to 27 percent.
The group reported continued strong cash conversion with underlying free cash flow of GBP 172 million, representing 113 percent of underlying profit after tax in the period. Operating profit jumped 22 percent year-on-year to GBP 180 million.
Management expects good returns from the investment in acquiring US daily fantasy sports business Draft.
Looking ahead, the company expects full-year EBITDA (including a provision for GBP 15 million in losses on Draft) to reach GBP 445 million to GBP 465 million.
Outgoing CEO Breon Corcoran said:
“We continue to make substantial investments to position Paddy Power Betfair as a structural winner in a dynamic and highly competitive market. The focus of this investment is to use technology to improve efficiency and minimise the cost of servicing our customers and to further enhance our customer proposition.
“The integration of our technology platforms is on track for completion by the end of the year and will bring significant benefits including increased quantity and pace of new product development in 2018 and beyond.
“Ahead of that, our customers and shareholders are already seeing benefits from efficiencies and investments. In the first half alone, customers enjoyed approximately GBP 30 million of extra value through better odds, more generous offers and new loyalty benefits.
“Operating efficiency and the annualisation of merger-related cost savings resulted in strong operating leverage in the period, with operating profit up 22 percent.”
