Betting Growth spurt from Paddy Power
Mobile betting has boosted Paddy Power’s online figures considerably and its retail operations have also been performing impressively, in the UK at least.
PADDY POWER B
ookmaker Paddy Power is continuing to impress with its contin- uous international growth, although its
original Irish retail business is far from thriving. The company announced that it has made an underlying profit before tax of 56.8m euro (£50.4m), up 15 per cent on the same period in 2010, with 81 per cent of group operating profit from online activities and 73 per cent of it accrued from interna- tional activities. However, the company’s Irish Retail division reported operating profit down 44 per cent to 5.1m euro (£4.5m), with like-for-like stakes down 1 per cent. Despite this, the company said it is still out- performing its competitors in a suffering market. It commented: “Our turnover per shop is more than twice the average of the rest of the industry. This enables us to give better value and service to our customers, while still achieving market-leading profit levels. We are continuing to manage our costs tightly in the face of the downturn. We achieved a further 4 per cent reduction in direct operating costs per shop in the period, taking the cumulative reduction to 20 per cent since the first half of 2007. As a
result, over the past three years we have been able to open 22 shops, while our competitors have closed some 245 shops.”
In comparison, the company is making hay in its UK retail estate. It explained: “Our expected sports- book gross win percentage in UK Retail is 12 per cent as compared to approximately 17 per cent for our quoted competitors, resulting in materially better value for Paddy Power customers. The 27 shops opened in the year to date take our estate to 151 today, which is less than 2 per cent of a market of almost 9,000 shops. This allows us to focus our expansion on compet- itive prime high street locations that we are confident will remain attractive bookmaking sites for the best operators. “With the economic downturn, we are also benefiting from an excellent choice of locations and some additional flexibility on lease terms. Based on the current envi- ronment, we expect to open 35 to 40 shops annually in the UK.”
But it is online where the company is really excelling and Paddy Power reported a 26 per cent increase in profits for the first half of the year to 36m euro (£31.9m), despite the strong com- parative period containing the 2010 World Cup. Active customers were up 48 per cent, amounts staked up 43 per cent and revenues up 35 per cent. Operating cost growth of 44 per cent was described as ‘broadly in line with the ‘top line’ growth’. The firm said that growth in UK active customers was particularly strong, accelerating to 58 per cent in the period.
It said: “The amounts staked on the sportsbook increased by 44 per cent to 728m euro (£645.4m). Within this, bet volumes grew 54 per cent to 47.5m while the average stake per bet decreased by 7 per cent to 15.33 euro (£13.59). Sports- book gross win increased by 42 per cent. Gaming and other revenue increased by 26 per cent to 43m euro (£38.1m) driven primarily by games, casino and bingo.”
ANALYSIS
A good sportsbook performance means good gaming revenue growth as Paddy Power’s gaming teams adopt a ‘rigorous test-and-learn approach to cross-selling and other promotions’. This particular boost, though, appears to have been powered by the mobile phone. As the firm
explained: “A key driver of this growth continues to be our disproportionately large share of the rapidly growing mobile betting market. During the period, our mobile turnover was up 279 per cent to 157m euro (£139.2m) or 22 per cent of total sportsbook stakes, with 35 per cent of our online sportsbook customers transacting with us via mobile.”
PADDY POWER’S CHAMPIONS LEAGUE REFUND PROMOTION COST IT OVER 3M EURO
New £1m football game
launched GAMING
new unique online foot- ball gaming platform has been launched to tie in with the kick off of the new football season. Isle of Man-licensed Goaldash takes goal times from pro- fessional football in the United Kingdom and makes them into a simple weekly game format. Players are encouraged to choose six teams, from across the English and Scottish leagues and have a chance to win up to £1m on offer each and every week. Predicting the six fastest goals on any Saturday match nets the top prize, with smaller prizes for matching five, four and three teams who score the quick- est goals. Players are able to select several lines to increase their chances of winning. It costs £1 per line to play and players can pick their favourite numbers at random or try to work out the winning teams using comprehensive goal scoring data provided by Goaldash. Goaldash, who were granted a licence earlier this year by the Isle of Man Gov- ernment’s Gambling Super- vision Commission, were required to satisfy the juris- diction’s licensing require- ments and comply with the stringent online gaming standards and player pro- tection rules.
A Goaldash chief executive
Gala Coral’s performance slips G
FINANCIALS
ala Coral has seen a drop in turnover and profits so far in 2011 according to the firm’s recent financial announce- ments. In the six months to 9 April 2011, the firm reported a 3 per cent drop in turnover to £616.2m, with an 11 per cent reduction in Group EBITDA (pre-excep- tionals) to £149.7m.
The company said that
Coral’s over the counter (OTC) turnover showed decent growth in the second quarter, with machines revenue stable. However, profitability in the remote
move certain operations to Gibraltar is progressing well, with the launch of the first new website expected early in 2012.”
NEW CORAL CEO ANDY HORNBY
gambling business was down 22 per cent on the same period in 2010. The firm said: “The plan to re- platform all of the group’s remote businesses onto Playtech’s software and
10 BettingBusinessInteractive • SEPTEMBER 2011
It added that Eurobet Italia has continued to grow market share with sports betting stakes up by 15 per cent year on year, although mixed results have impacted gross win margins over the first half of the year.
Things have not improved for the firm in the third quarter of the year either as comparisons with the same period in 2010
have been poor because of the boost provided by last year’s World Cup Finals. In the third quarter, Gala Coral reported an 8 per cent drop in turnover to £251.8m, with an 18 per cent reduction in Group EBITDA (pre-exception- als) to £56.3m.
Excluding the World Cup, Coral OTC amounts staked were 3 per cent ahead of the prior year, with turnover from machines level against a strong Q3 in 2010. At a gross profit level Coral was level with the prior year,
after adjusting for the 2010 World Cup and changes in VAT. The bookmaking arm also attracted a new CEO during with period, with Andy Hornby joining in July. Remote turnover continued to fall behind prior year levels, with profitability 5 per cent lower than Q3 2010. Eurobet Italia showed con- tinued growth (up 19 per cent) in sports betting amounts staked (excluding 2010 World Cup), although gross win margins remained variable in the quarter and below those achieved in the prior year.
Jeremy Bourke commented: “This is a site for anyone who likes football and has enjoyed the thrill of placing a bet, be it on the lottery or elsewhere. We expect that our £1 stake to win £1m game will appeal to a wide range of players. Our smart technology platform employs an innovative e- wallet and payout system, live data feeds to update our winning draws and a com- prehensive statistics section. We believe that the simplicity of this system along with our unique approach makes Goaldash an attractive proposition. “Later this year we will also be introducing a basket of games that extends the Goaldash quickest goals game, and enables us to engage with customers throughout the week. We anticipate steady growth for the rest of 2011 with acceler- ated growth in the new year when our newspaper and TV partnerships begin.”
ACTION IMAGES / CARL RECINE LIVEPIC
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