Paddy Power Betfair (LON:PPB) has updated investors on its half-year performance this morning.
Highlights from the company statement:
– Revenue up 9% to £827m, driven by good stakes growth (Online up 10%, or 15% excluding Euro 2016, and Australia up 16%6) and foreign exchange, partially offset by increased investment in pricing and promotions
– Strong Q1 growth driven by more favourable Cheltenham results, with Q2 affected by the absence of a major football tournament and adverse sports results
– Underlying EBITDA3,4 up 21% to £220m with EBITDA margin up 3 percentage points to 27%
– Continued strong cash conversion with underlying free cash flow of £172m representing 113% of underlying profit after tax in the period
– Entry into the daily fantasy sports market in the USA with the acquisition of Draft an early-stage operator
– Full year underlying EBITDA, including £15m of losses in DRAFT, expected to be between £445m and £465m
Breon Corcoran, Chief Executive, commented:
"We continue to make substantial investments to position Paddy Power Betfair as a structural winner in a dynamic and highly competitive market. The focus of this investment is to use technology to improve efficiency and minimise the cost of servicing our customers and to further enhance our customer proposition.
The integration of our technology platforms is on track for completion by the end of the year and will bring significant benefits including increased quantity and pace of new product development in 2018 and beyond.
Ahead of that, our customers and shareholders are already seeing benefits from efficiencies and investments. In the first half alone, customers enjoyed approximately £30m of extra value through better odds, more generous offers and new loyalty benefits.
Operating efficiency and the annualisation of merger-related cost savings resulted in strong operating leverage in the period, with operating profit up 22%."