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Paddy Power Profits Up

Paddy Power released interim results for the first half of fiscal 2011. The Irish bookmaker reported that profits before tax were up 15% to €56.8 million from €49.4 million during the first half of last year. Earnings per share rose 18% to 97.1 cent from 82.2 cent in 2010. According to management, online operations now represent more than 80% of operating profit. The company also said it made almost as much profit through its online and mobile phone applications alone in the first half of the year as did overall in the same period last year.  

The stellar results came despite the World Cup inflating numbers in the first six months of 2010. “The World Cup is always a tough comparable and the economy is still a headwind but we’re delighted with top line growth across all the divisions and with 81% of profit now coming from internet and mobile,” said Chief Operating Officer Breon Corcoran. Patrick Kennedy, the company’s Chief Executive, highlighted that all divisions with the exception of its Irish betting offices saw an increase in profitability during the first half of the year.
Paddy Power now has almost 1 million customer accounts worldwide. Just over a third of its active customers made transactions via mobile devices, and the company claims it has grabbed 30% of the fast-growing mobile phone market in the United Kingdom. The total amounts staked by Paddy Power customers across all its operations climbed 18% in the first half of the year to €2.25 billion, while the company’s gross win increased 18% year-over-year to €242 million. Further, management is proposing to pay shareholders an interim dividend of 30 cent per share, a 20% increase from last year.

“The results highlight Paddy Power’s superior online performance relative to its competitors,” Gavin Kelleher, analyst at Goodbody Stockbrokers wrote in a note to clients. Paddy Power’s shares, which rose 6% on Monday ahead of the results, are up over 30% in the past 12 months. Paddy Power is listed on both the Irish and London Stock Exchanges. Some 70% of shares are held by institutions, while the board and senior management own 15% of the company.

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