Paddy Power's aggressive move into online gaming is bearing fruit, with online now generating 79 per cent of the group's €119.5m (£100m) operating profit. A run of luck for punters petered out in the second half, too, and sports book revenues are now more in line with the long-term average.
Online revenues and profits both grew 26 per cent in the year to €295m and €95m, respectively. UK growth was especially noticeable with the number of active customers rising 50 per cent in a year without a football world cup. Customer retention looks key to this growth rate, with about a third of punters still active a year after joining. The Australian online business grew slower with underlying sales 9 per cent higher at €107m, partly because in-play betting is currently banned - although the Australian government plans to amend its gambling laws. Paddy Power's Irish retail arm was hit by poor economic conditions and profits here fell 38 per cent to €10.9m. That was partially offset by the UK retail side's rapid expansion - over 40 shops opened last year and management estimates that each new opening generates cash profits of €160,000 on a capital outlay of €322,000.
Broker Peel Hunt forecasts 2012 adjusted pre-tax profit of €130m, giving EPS of 220¢ (€121m and 212¢ in 2011).
PADDY POWER (PAP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4,500¢ | MARKET VALUE: | €2.20bn | |
| TOUCH: | 4,484-4,500¢ | 12-MONTH HIGH: | 4,550¢ | LOW: 2,870¢ |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 470¢* | NET CASH: | €136m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2007 | 279 | 75.8 | 127 | 51.0 |
| 2008 | 284 | 81.7 | 146 | 54.0 |
| 2009 | 296 | 67.2 | 122 | 58.4 |
| 2010 | 426 | 111 | 193 | 75.0 |
| 2011 | 499 | 143 | 255 | 100 |
| % change | +17 | +29 | +32 | +33 |
Ex-div:14 Mar Payment:25 May *Includes intangible assets of €145m, or 295¢ a share £1=€1.20 | ||||
