CHAMPAGNE RESULTS FROM PADDY POWER

7 September 2007

Successful run of sporting results has boosted operating profit over 100 percent


The Dublin-based gambling group Paddy Power will be in celebratory mood this week on the back of an exceptional first six months 2007 that have seen operating profits soar by over a hundred percent.

A Paddy Power statement said that an extraordinary run of favourable sporting results was behind the huge boost to operating profits in the first six months of the year to over Euro 40 million. Online operations alone saw profits rise over 50 percent to Euro 15 million.

CEO Patrick Kennedy revealed that horse racing, football, rugby and golf events produced a series of “unlikely and certainly lightly-backed results”. Even the Irish punters saw their luck desert them with a succession of fancied Irish-trained horses failing to trot up at Cheltenham, Aintree and in the flat classics.

“When the going gets tough, some people grow a beard and hide in a bunker, but we went for the get going approach,” Kennedy added. “We ran some of our most generous specials during the period, building our brand and customer loyalty for the future.”

Paddy's managing director for online operations, Breon Corcoran, added that the specials included handing back losing bets on the twins in the recent series of Big Brother and would also see the firm hand back losing bets in the rugby World Cup if the last try in the match is scored by the number 13. “Customer retention is crucial,” he added. He went on to reveal that online operations showed strong growth.

The company statement showed that total amounts staked online grew to Euro 297 million (Euro 248 million last time) while gross win rose to Euro 46 million (Euro 31 million) in the same period last year.

Total revenues across the group rose 37 percent to Euro 144 million (Euro 104 million). Total profit across the group rose a stunning 103 percent to GBP 35.4 million (Euro 17 million last year).

UK and Irish retail contributed Euro 82 million in revenue and Euro 22 million in operating profit.

Online sportsbook sales alone increased 19 percent to Euro 297 million while gross win rose 53 percent to Euro 27 million.

The company has successfully migrated its online poker interests to the Playtech platform and network, a move mandated by the sale of previous provider Tribeca Tables.

Paddy Power’s German and Spanish language sites have continued to show good growth, emphasising the advantages of localisation despite being produced in Dublin. Corcoran said: “We have a dedicated team of German nationals. The content is German, the PR effort is German focused. It is very much the same for the Spanish market, with dedicated design and content. We have a deep labour pool in Dublin.”

German and Spanish markets were predominently sports betting at present, and both were big on football. However, Corcoran added that the firm was also the first to start offering betting on bull-fighting in Spain. “We are the first. That has been picked up by the media and has generated a deal of PR,” he said.

Corcoran opined that there was evidence of increased competition in the UK and Ireland. “There are signs of new entrants in the UK, such as Unibet.

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