Paddy Power Betfair 2016 interim results

DividendMax Ltd.

Paddy Power Betfair 2016 interim results

H1 highlights

Revenue up 18% to £759m, with double-digit growth in all four divisions:

- Online revenue up 20% to £440m, with sportsbook stakes up 20%;

- Australia revenue up 17%2 to £129m, with sportsbook stakes up 30%2;

- Retail revenue up 12% to £147m, with sportsbook stakes up 10%; and

- US revenue up 16% to £43m 

Operating leverage delivered underlying EBITDA growth of 31% to £181m, notwithstanding a £37m (+31%) increase in marketing spend

Interim dividend of 40 pence per share takes total dividends for the period to 52 pence per share (closing dividends paid on merger relating to January 2016 equated to 12 pence per share)

Q2 highlights

Revenue up 20% to £420m, including a strong Euro 2016 performance

Underlying EBITDA up 33% to £122m and underlying operating profit up 40% to £105m

Merger update and outlook

Merger integration progressing ahead of plan with the majority of actions already completed

Now expecting £65m of cost synergies with the full benefit to be achieved in 2017, a year earlier than originally envisaged

Full year 2016 proforma underlying EBITDA is expected to be between £365m and £385m

Breon Corcoran, Chief Executive, commented:

"Paddy Power Betfair has sustained good momentum through a period of considerable change. The restructuring is now largely complete and the merger synergies are being delivered ahead of schedule.

We are creating a world-class operation by exploiting the unique assets and capabilities of each legacy business, particularly in the key functions of technology, marketing and trading.

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".

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