The £7bn tie-up between Paddy Power and Betfair continues to reap rewards, with the bookmaker receiving cost benefits from the merger ahead of schedule which have helped to weather a year of “customer-friendly” sports results.
On Tuesday, the bookmaker reported a £5.7m loss for the financial year ended 31 December 2016 due to expenses related to its merger completed in 2016. But the FTSE 100 group said its performance was better understood through its underlying results which showed revenues up 18 per cent to £1.55bn.
Underlying earnings before interest, tax, depreciation and amortisation increased 35 per cent to £400m, just beating consensus analyst expectations of £397m.
The business grew rapidly despite a rollercoaster year of sports results that meant net revenues from its sports gambling business was “marginally lower than our normal expectations”.
Last year’s Cheltenham Festival resulted in losses as favoured horses raced home, while a string of upsets during the summer’s Euro 2016 football tournament was a boost to the company.
“Customer friendly football results” in December helped to depress the bookmaker’s winnings for the year.
Breon Corcoran, chief executive said:
2016 was a transformational year for Paddy Power Betfair with much of the integration of the businesses completed sooner and more efficiently than expected…
We have created a business with considerable scale that is stronger and better able to compete than either of the individual legacy companies. The group is well positioned to deliver sustainable, profitable growth.
The company added that this year’s trading has been “in line with our expectations”, with sports betting stakes up 16 per cent on a constant currency basis.