PPB reported a 25% increase in revenues as favourable forex rates boosted performance
Companies: Betfair Group, Flutter Entertainment Plc
Paddy Power Betfair Plc (LSE: PPB), put out a positive Q3 trading update this morning saying revenue for the quarter was up 25% (£404m), and underlying EBITDA was up 53% (£113m). The Irish sports betting firm has raised its full-year profit guidance, with underlying EBITDA now expected to be around £400m.
Group revenues increased 25% to £404m, which included a £28m benefit from the depreciation of sterling on overseas revenues. On a constant currency basis revenue was up 15%. The company said growth had been driven primarily by sports, and a strong conclusion to the Euros, with sportsbook bets up 26%.
The EBITDA margin of 28% was a considerable increase from the 23% reported in FY15, leading to an underlying operating profit of £95m (+68%). It is worth noting that EBITDA benefitted from a £2m foreign exchange boost. Worsening Forex rates also raised operating costs by 14% (3% constant currency).
PPB, one of the world's largest sports betting and gaming companies, was formed in February this year as Paddy Power Plc and Betfair Plc merged to form the new group.
CEO Breon Corcoran said it was another good quarter for PPB, as it continued to focus on building a stronger combined operation with the unique assets and capabilities of each legacy business:
"Work is underway to combine the best of Betfair and Paddy Power's technology into a multi-brand, multi- channel, multi-jurisdictional platform that will start to unlock the full potential of the Group's scale and will lead to increased pace of development and faster roll out of new products."
The Dublin-based firm's share price rose 3% in early trading.
