Paddy Power narrows FY guidance as Q3 profits fall

2nd Nov 2018 07:06

(Sharecast News) - Gambling outfit Paddy Power Betfair raised the lower end of full year guidance as it reported a 16% fall in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to £101m.The figures include losses at the newly acquired FanDuel operation in the US. Proforma EBITDA was flat on a constant currency basis.The company said it now expected full year EBITDA, pre-US sports betting, to be between £465m - £480m from previous guidance of £460m - £480m adding that 2018 US sports betting investment would be around £25m.Reported group revenue was up 10% to £483m, benefitting from the FanDuel acquisition in July 2018 but adversely affected by foreign exchange translation Paddy Power said.Revenue in July benefitted from a "good conclusion" to the football World Cup which contributed £22m revenue to the quarter, although growth in the quarter was adversely affected by customer friendly sports results in Australia.Retail revenue fell 4% to £82m, with UK shops down 1% and Irish shops 6% as sports revenues were impacted by weaker margin.Chief executive Peter Jackson said online revenue was up 15% driven by "enhancements in product and good execution in promotions and marketing"."In Australia, we continue to see very good scope to enhance Sportsbet's leading customer proposition and target additional market share gains," he said."In the US, the exciting potential of the sports betting opportunity and the strength of our strategic positioning has been evidenced by our experience to date in New Jersey.""FanDuel recorded a 30% share of the sports-betting market in September, driven by a market-leading customer proposition, our strong brand presence and the ability to cross-sell from our fantasy sports player base."