Bookmaker Paddy Power racked up more than $65 million in losses at the end of June as the gambling company shelled £200 million ($264.41 million) to cover the cost of its merger with Betfair.
Reporting on its interim results, the combined group said it lost £49.3 million ($65.18 million) in the first six months of 2016 compared with the £106 million ($140.14 million) profit it posted in the same period last year on the back of £195 million ($257.8 million) in merger expenses.
The loss came despite the 18 percent spike in revenues at the betting company to £759 million ($1.003 billion) from £642 million ($848.76 million) the previous year. Online revenues increased 20% to £440 million ($581.7 million), courtesy of a 21% and 20% jump in sportsbook and gaming revenues respectively.
Australia-facing Sportsbet also posted a 17 percent year-on-year increase in revenues, although the company’s adverse sports results led to a 10% decrease in underlying EBITDA.
Despite the losses it incurred, Chief executive Breon Corcoran said he was pleased with the merger’s progress. In fact, the operator expects a £65 million ($85.9 million) boost from cost synergies related to the merger in 2017—a year earlier than forecast.
“The restructuring is now largely complete and the merger synergies are being delivered ahead of schedule,” Corcoran said in a statement. “While our industry remains highly competitive and is exposed to the prevailing economic and regulatory environments, our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth.”
Paddy Power co-founder steps down from board
Meanwhile, the firm announced that Stewart Kenny has left his role as non-executive director on the board. The Paddy Power co-founder previously served as the company’s CEO until 2002, and then as chairman from 2002 to 2003. Kenny was a board member for the past 13 years.