Paddy Power Betfair was the strongest gainer on the FTSE 100 on Friday after strong third quarter results and a raised profit guidance for the full year.
Earnings before tax rose 53 percent in the three months to September 30th, with revenue up 25 percent to £404 million. This included a £28 million benefit from the translation of non-UK revenues due to the weakness of sterling.
Paddy Power merged with Betfair at the beginning of the year in a deal worth £5 billion. Paddy Power shareholders own 52 percent of the combined business, with the remaining 48 percent owned by Betfair investors. The combined business aimed to bring in annual revenues of around £1.1 billion, with the company saying in a statement today that the process of combining the two firms was “ahead of plan”.
Breon Corcoran, Chief Executive, commented:
“This was another good quarter for Paddy Power Betfair. We are continuing to focus on building a stronger combined operation by exploiting the unique assets and capabilities of each legacy business, and on using our scale to better serve our customers.
“Work is underway to combine the best of Betfair and Paddy Power’s technology into a multi-brand, multi- channel, multi-jurisdictional platform that will start to unlock the full potential of the Group’s scale and will lead to increased pace of development and faster roll out of new products.”
In a statement, the group raised their full-year profit forecast to between £390 and £405 million, up from the previous guidance of £365 million and £385 million. They said:
“Since our Interim results trading has been good, with favourable sporting results in the second half of Q3 mitigating poor horseracing margins in July and early August.
“Most of the actions required to deliver the £65 million of annual synergy savings from the merger have been completed and integration is ahead of plan. We now expect £35 million of merger synergy benefits in 2016, £5 million more than previously forecast.”