 £5 million in the fourth quarter, the company has said.){kind=link}
Donald Trump’s surprise victory has cost bookmaker Paddy Power Betfair (LON:PPB) £5 million, the company said on Monday.
In addition to sizeable losses relating to President Trump’s November win, Paddy Power Betfair also lost money on footballing bets across December. A series of “customer friendly” wins from football teams like Chelsea during the Christmas period, led to the losses.
Following Trump’s inauguration, the bookmaker halved its odds on the chances of the newly-elected President’s resigning before the end of his four year term, or of being impeached. Only two U.S President’s have ever been impeached – Andrew Johnson in 1868 and Bill Clinton in 1998.
Despite unanticipated world and footballing events putting a dent in profits, underlying annual earnings were still expected to hit the middle range of initial projections of £390 – £405 million. Moreover, a weak performance from its online division saw a 3 percent year-on-year fall, despite a 15 percent growth across sportsbook stakes. In spite of this, total revenue in the final quarter still increased by 10 percent to £388 million. Similarly, annual collective revenues rose by 18 percent to £1.55 billion.
Cost saving exercises in areas of staff expenses and with regards to marketing had enabled the betting firm to mitigate the December losses and meet its middle-range targets.
The company’s marketing campaign has in recent days attracted criticism, following a report by The Advertising Standards Authority (ASA), over its 2010 “blind football” adverts. According to the data, the advert came in fourth in the top ten of most complained about advertisements, having drawn 450 complaints from consumers. The agency nonetheless concluded that none on the list “crossed the line” from bad taste to offensive material.
Amid the news of Trump-related year-end losses, shares in Paddy Power Betfair group ltd were down 2.19 percent in early morning trading, as of 09.32 AM (GMT).
Read more about Trump’s historical inauguration Last Friday, here.