Drury Communications

Client News

Paddy Power plc - preliminary results announcement for the year to 31 December 2009

02 March 2010

Business Development Highlights:

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Established the number one position in the highly attractive Australia online corporate bookmaker market through two acquisitions;

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Established new business-to-business revenue stream, securing PMU in France, the world’s second largest betting organisation, as the first client;

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Opened 25 new shops in the UK, our largest ever number in a single year, whilst also maintaining positive momentum in UK Retail profits;

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Continued geographic diversification with trading profits from UK customers 44% and, on an annualised basis, Australian customers 20% of Group profits;

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Increased exposure to internet growth with trading profits from online 75% of Group profits (2008: 57%);

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Increased market share and turnover in all divisions.

 

Financial Highlights:

 

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Diluted EPS of 120.7c, down as expected versus 2008 due to an adverse swing in the run of sporting results (2008: 137.8c);

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Continued growth in our Online division, with growth in constant currency of 7% in gross win and 13% in operating profit to €45.7m*;

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Increased market share in Irish Retail from 26% to 32% and operating profit of €16.3m (2008: €28.3m);

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Continued profit growth in UK Retail to €1.3m (2008: €1.2m) with like-for-like EBITDA per shop in Great Britain up 7% to £120,000;

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Reduced like-for-like operating costs* by 4% in constant currency, while investing in key areas and without compromising the customer experience;

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Confidence in the underlying performance of, and prospects for the Group, with a 10% increase in the proposed final dividend to 38.9c, implying an 8% increase in the full year dividend to 58.4c;

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A strong balance sheet, with net cash at 31 December of €75m.


Commenting on the results Patrick Kennedy, Chief Executive, Paddy Power plc said:

‘Despite the economic problems, 2009 was a cracking year for Paddy Power punters on two fronts.  
The year saw a slew of punter-friendly sporting results which was the exact opposite to the 
experience of the prior year.  Also, Paddy Power once again invested heavily in bringing 
unsurpassed value to our customers through a range of ‘stand out’ offers.  This focus on value 
saw the Group drive up turnover and enhance market share across all channels by competing 
aggressively and attracting and retaining a record number of customers.On the development front 
we have taken significant steps in geographic expansion through the continued growth of our UK 
Retail network, the successful acquisition of Sportsbet and IAS in Australia and through a B2B 
online agreement with PMU to provide risk management and pricing expertise.

In recent months we have engaged with the Irish Government on the potential for taxation of telephone and online betting in Ireland.  In our view, such a tax will raise only relatively modest revenue, will be costly to implement and will be problematic, if not impossible, to enforce; points we have made to the Government with accompanying evidence.  We have nonetheless never had an objection to paying tax on the internet betting of Irish customers, assuming that any tax is enforceable on all internet bookmakers providing services to the Irish market and not just on those of us who are based in Ireland providing valuable sustainable employment.’

 

* Prior to the inclusion of the Group’s acquisitions in Australia during 2009