Paddy Power promises £500m cash return to investors as profits slip

Profits for betting company Paddy Power slipped in the first quarter, as a sustained period of bookmaker friendly sports results and a high level of racing fixture cancellations took their toll.

The firm also reassured investors that it was planning a £500m cash return to shareholders over the next 12 to 18 months as it worked towards a "more efficient capital structure whilst retaining substantial strategic flexiblity."

Operating profit slipped to £80m from £91m for the same period last year, a 12 per cent fall.

Read more: Paddy Power's revenue jumps as it braces for more regulatory hurdles

Revenue also saw a two per cent year-on-year decrease down to £408m in the first few months of 2018.

Online revenue was down two per cent to £219m, as sports revenue depleted one per cent as a number of horse racing events were cancelled for adverse weather.

Gaming revenue slowed four per cent in the first quarter too, though the company said it thought the migration of customers to an integrated technology platform in January had improved the brand's gaming product.

"We have made good progress against our strategic priorities," said Peter Jackson, Paddy Power chief executive.

"In Europe, the successful completion of our platform integration has resulted in a meaningful improvement to the Paddy Power product. This has seen the brand's gaming revenue returning to growth from February and a significant uplift in Cash Out usage and in-running betting during the Cheltenham Festival.

"In Australia, Sportsbet continues to perform well and is targeting further market share growth, with additional investment planned to take advantage of any disruption arising from market consolidation and the introduction of increased taxes.

"Notwithstanding lower profits in the first quarter, we expect full year underlying EBITDA of between £470m and £495m."

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CityAM

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