Paddy Power Betfair to leave Gibraltar office

26 May 2017

Paddy Power Betfair is to close its Gibraltar office and relocate operations to another of its European sites.

The gaming giant told public service broadcaster GBC that the move has been discussed as a means of centralising services since the merger of the two companies in February 2016.

The approximately 20-strong workforce will be offered relocation opportunities, it is believed.

Paddy Power Betfair is headquartered in Dublin, Ireland, and has offices in a number of European countries, including the UK, Portugal, Romania, Malta and Italy.

Paddy Power and Betfair set a target of £50m in synergy savings ahead of their merger last year.

Meanwhile, Paddy Power Betfair was upgraded and William Hill downgraded as Credit Suisse revised its view of the companies due to the regulatory environment in the UK and Australia.

Analysts at the finance group decided that the base case of regulatory risks for UK machine gaming plus online taxes in the UK on gaming and in Australia implies between 2-23% of 2018 estimated profit before tax is at risk.

William Hill was downgraded to 'neutral' due to the perceived scale of regulatory risk and the fact that it had more expensive valuation than Ladbrokes Coral, which was kept at 'neutral'.

Paddy Power Betfair was raised from 'underperform' given lower regulatory concern and the shares' major de-rating after integration concerns.

Credit Suisse said Australia is the key regulatory threat for Paddy Power Betfair, but based on next year's numbers, the shares that were trading for over 30 times earnings are now 20 times EPS.

Related article: Paddy Power Betfair reveals major profit jump in Q1