Newly merged online gambling behemoth Paddy Power Betfair reported growth across all its brands in Q1 as the company continues to integrate its operations.
On Wednesday, the company released a trading update covering the three months ending March 31, with pro forma figures to allow for more accurate comparisons with their formerly standalone operations.
Overall group revenue rose 16% to £339m, earnings rose 27% to £59m and operating profit jumped 36% to £43m. Group CEO Breon Corcoran said all four of the company’s brands – Paddy Power, Betfair, the Australian-facing Sportsbet and the US-facing TVG – had started 2016 off on the right foot, particularly given the internal upheaval surrounding the post-merger integration.
Total online revenue was up 17% to £195m, with sports revenue topping £135m thanks to a 23% rise in stakes, while exchange and B2B revenue improved 5%. Online gaming revenue was also up 17% to £60m, with mobile gaming rising 43% and now claiming 56% of total gaming revenue.
In Australia, Sportsbet’s online sports stakes rose 31% to £577m as active customers improved 42%. However, adverse sports results kept revenue to £58m (+25%). The company says its online in-play sports app – which, unlike the legally sketchy apps released by Sportsbet’s down under rivals, uses a public switched telephone line – was responsible for strong growth in ‘telephone’ staking.
Stateside, Betfair US reported revenue up 22% to £20m thanks to 19% growth at TVG as well as continued growth at Betfair’s New Jersey-licensed online casino. On May 10, Betfair US will launch America’s first licensed exchange wagering platform in conjunction with local racetrack partner Monmouth Park.
Paddy’s retail revenue rose 5% to £67m, with sports up 3% and gaming machines rising 8%. Excluding the impact of new shops and currency fluctuations, like-for-like revenue fell 1%. The company operated 601 shops at the close of Q1, a net gain of three from Q4.
Corcoran said this year’s notoriously punter-friendly Cheltenham Festival had enriched Paddy Power Betfair customers by £20m, with Irish punters coming off particularly well due to the number of Irish nags who made good on their advance billing. Corcoran said Cheltenham alone was responsible for a 1.5 point negative movement in the company’s sports margin.
Regarding the Australian government’s recent announcement that it would more vigilantly enforce its online in-play sports betting ban, Corcoran called it “not materially sad news,” just “an incremental headwind we could do without.”