There's no doubting a powerful player has been created with Paddy Power Betfair (PPB), after the February merger of the gambling groups. Even on its own, Paddy Power managed to surpass €1bn (£0.78bn) in revenue for the first time in 2015, thanks to double-digit growth in its online and retail divisions.
For Paddy Power, management reckons 84 per cent of 2015 operating profit came from internet activity, up from 77 per cent in the previous year. Online business has been particularly strong in Australia; revenue there rose by half to nearly €80m. The combined Paddy Power Betfair would have reaped 87 per cent of total group operating profit from online activities.
Betfair's figures have been reported separately, given the deal closed post period-end, but pro-forma figures suggest combined net revenue would have pushed past €1.3bn. In terms of Betfair's third-quarter update, it reported a 10 per cent year-on-year rise in adjusted cash profit to €26m, thanks to a 51 per cent increase in sportsbook stakes and favourable football results.
Analysts at Numis Securities expect pre-tax profit for the combined entity of £274m in 2016, leading to EPS of 272p, compared with £227m and 225p in 2015.
| PADDY POWER BETFAIR (PPB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 9,445p | MARKET VALUE: | £7.91bn | |
| TOUCH: | 9,435p-9,450p | 12-MONTH HIGH: | 10,850p | LOW: 5,131p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 83¢* | NET DEBT: | 91%** | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 0.50 | 143 | 255 | 100.0 |
| 2012 | 0.65 | 139 | 251 | 120.0 |
| 2013 | 0.75 | 141 | 257 | 135.0 |
| 2014 | 0.88 | 167 | 301 | 152.0 |
| 2015 | 1.09 | 169 | 327 | 180.0 |
| % change | +24 | +2 | +8 | +18 |
Ex-div: 31 Jan Payment: 2 Mar *Includes intangible assets of €191m, or 228¢ a share £1=€1.29 **Following the merger, the group's net debt at 8 March had increased to £63m, excluding customer balances | ||||
