UK-listed bookmaker Paddy Power Betfair is injecting more money into its annual marketing budget to fend off future revenue malaise following government crackdowns in key markets.
Paddy Power Betfair made the announcement on Wednesday as the company reported its first full-year results since rivals Paddy Power and Betfair merged in February 2016.
In a disclosure to the London Stock Exchange, Paddy Power said the company’s overall revenue grew 13 percent to £1.745 billion (US$2.42 billion) as a result of a robust sports betting segment. Operating profits jumped 19 percent to £392 million ($543.8 million) in 2017 from £330 million ($457.8 million) in the previous year.
Many financial analysts, however, observed that the 2017 growth rate was slower than previous years.
Paddy Power Chief Executive Peter Jackson, who took over from Breon Corcoran last month, disagreed with the financial analysts, noting that the group experienced good growth last year.
“Our Australian and retail operations performed particularly well, growing profits by over 40 percent,” Jackson said in a statement. “But if you look at our businesses across Europe, the results are strong, but we have to acknowledge that we were hampered by the focus we had on finishing our integration work.”
Jackson admitted that the Paddy Power brand is affected by the competition posed by rivals Bet365, Ladbrokes Coral and William Hill, while the Betfair brand underperformed last year.
To sustain the company’s growth trajectory, Jackson said that the company will add £20 million ($27.7 million) to its £300 million ($416.2 million) annual marketing budget and spend more on advertising.
Paddy Power Betfair also proposed that its three regional chief executives will run the group’s European, Australian and U.S. businesses, reporting directly to Jackson.
“Within this structure, there is clear ownership for each of the Group’s brands. This simplifies decision making, particularly in relation to the Paddy Power and Betfair brands, and facilitates an increased focus on each brand’s identity and customer proposition,” the company said.
