Paddy Power Betfair have announced healthy profits for the Q1 period. There was an increase in revenue by 16%, reaching £339 million. This comes during a period where many other online casino operators are reporting drops in their profits and shares, with William Hill recently claiming 13% drop in shares due to new UKGC regulations.
With the Paddy Power Betfair merger being one of the first large scale industry mergers, it appears to back up their belief that merging is the future of industry.
Paddy Power Betfair Profit Breakdown
Paddy Power Betfair's biggest achievement was their increase in net profits. Net profits before tax, increased by 27% to £59 million. For comparison, the company made £47 million pre tax, within Q1 2015. Their operating profit was also an improvement, having increased by 36% up to £43 million, compared to £31 million in Q1 2015.
Even with poor sports results, with the Cheltenham festival causing the most damage, during which betting companies took a hit as customers won far more than expected, Paddy Power Betfair's stakes increased by 21%, up to £2.3 billion.
Gaming revenue managed to peak at £60 million, making up 56% of their earnings during Q1. This was a 17% increase over Q1 2015, with 43% of that total coming from mobile gambling alone. The online market as a whole performed extremely well, reaching earnings of £195 million, a similar increase of 17% from Q1 2015.
At the end of March 2016, the group had a net debt of £54 million. Investors have been informed that PPB are confident that they can get it down to £50 million by the end of the year. This has been increased drastically in the last year due to the costs of the merger and will be lowered by consolidating roles within the company, as well as editing down the number of offices to more efficiently provide for the merger as a whole.
Paddy Power Betfair: Strength To Strength
Paddy Power Betfair is the first of the major mergers and looks to be getting even stronger. With their first full year out of the way, we're starting to see the payoffs that a casino operator merger can have.
Customers are even beginning to see the benefits also, with Paddy Power in house developed games appearing on the Betfair platform, as well as improved sports betting introduced across both platforms.