Paddy Power (PAP) plans to return €8 a share to investors - about 12 per cent of its market capitalisation - through a B-share scheme this year. The surprise move would push the company from its current net cash position into net debt of about one times cash profits. The subsequent share consolidation could boost earnings per share by as much as 9 per cent, calculate analysts at Goodbody - although they only expect to upgrade their 2015 forecast by about 3 per cent from 283ȼ.
The news came alongside a solid set of results for the Irish gambling company. Last year saw a 28 per cent increase in new online customers, 18 per cent growth in group net revenues to €882m and a 20 per cent rise in cash profits to €212m. But 2014 also marked the end of Patrick Kennedy's decade-long tenure as chief executive. He'll be replaced by Andy McCue, who has already put in eight years at Paddy Power.
So far this year, sports results have fallen largely in line with the board's expectations. Should the depreciation of the euro continue, 2015 operating profits could receive a €5m boost.
| PADDY POWER (PAP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 7,287ȼ | MARKET VALUE: | €3.56bn | |
| TOUCH: | 7,274-7,292ȼ | 12-MONTH HIGH: | 7,307ȼ | LOW: 4,712ȼ |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 791ȼ* | NET CASH: | €285m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2010 | 426 | 111 | 193 | 75 |
| 2011 | 499 | 143 | 255 | 100 |
| 2012 | 654 | 139 | 251 | 120 |
| 2013 | 745 | 141 | 257 | 135 |
| 2014 | 882 | 167 | 301 | 152 |
| % change | +18 | +18 | +17 | +13 |
Ex-div: 12 Mar Payment: 22 May *Includes intangible assets of €179m, or 367ȼ a share £1 = €1.37 | ||||
