Net decline for Paddy Power

Irish online and land-based betting operator Paddy Power has released its financial results for 2009 showing a 15 percent year-on-year decline in net profits to €67.2 million.

Last term, the Dublin-based firm announced a five-year outsourcing contract with French horseracing monopoly Pari Mutual Urbain (PMU) that will see it manage risk and pricing for a new online sportsbetting venture beginning next year. This is the group’s first business-to-business contract while it stated that it had also opened 25 new betting shops in the UK over 2009.

Despite this growth, Paddy Power revealed that its operating profit for 2009 fell twelve percent year-on-year to €66.7 million while associated costs rose seven percent to €191.3 million.

However, the firm announced that the amounts staked rose 31 percent compared to 2008 to €2.752 billion with an overall win percentage of 8.5 percent for its sportsbook activities while overall gross win increased four percent year-on-year to €295.9 million. All of this saw gross profits rise two percent year-on-year to €258 million while a lofty 69 percent of Paddy Power’s total operating profits for 2009, or €45.7 million, came from its online activities.

“Despite the economic problems, 2009 was a cracking year for Paddy Power punters on two fronts,” said Patrick Kennedy, Chief Executive Officer for Paddy Power.

“The year saw a slew of punter-friendly sporting results, which was the exact opposite to the experience of the prior year. Also, Paddy Power once again invested heavily in bringing unsurpassed value to our customers through a range of ‘stand out’ offers. This focus on value saw the group drive up turnover and enhance market share across all channels by competing aggressively and attracting and retaining a record number of customers.

“On the development front, we have taken significant steps in geographic expansion through the continued growth of our UK retail network, the successful acquisition of Sportsbet and IAS in Australia and through a business-to-business online agreement with PMU to provide risk management and pricing expertise.

“In recent months we have engaged with the Irish Government on the potential for taxation of telephone and online betting in Ireland. In our view, such a tax will raise only relatively modest revenue, will be costly to implement and will be problematic, if not impossible, to enforce; points we have made to the Government with accompanying evidence. We have, nonetheless, never had an objection to paying tax on the Internet betting of Irish customers, assuming that any tax is enforceable on all Internet bookmakers providing services to the Irish market and not just on those of us who are based in Ireland providing valuable sustainable employment.”