The share price for Paddy Power Betfair PLC (LON:PPB) has surged as they announce revenue and profit have jumped in the third quarter. Revenue for the betting company rose 9% compared to £440 million, and 8% on a constant current basis, mainly driven by 11% growth in sports revenue, which were in line with their expectations.
Revenue performance was also influenced by significant expansion in both Australian and US markets. In Australia revenue increased by 29% in local currency as continued product investment and promotional generosity led to a 33% increase in stakes. US revenue increased by 18% in local currency, with sports revenue up 18% and gaming revenue up 16%.
Retail Revenue was also up 12% to £85m and like-for-like revenue increased by 7% (excluding the impact of new shops and currency movements). The Irish bookmaker’s revenue was slightly offset as online, sportsbook and exchange revenue were all down on the quarter.
Underlying profit also performed strongly as it grew 8% on a constant currency basis to £101 million. These results will be considered far stronger than the numbers simply indicate when taking into account that in the same quarter in the year previous Paddy Power were experiencing a very strong contribution from EURO 2016, whereas this year’s third quarter had no such event.
Breon Corcoran, Paddy Power Betfair Chief Executive, commented that “Q3 was an encouraging quarter for Paddy Power Betfair, with good stakes growth despite the absence of a major football tournament”. The Betfair CEO since 2016, due to leave in January 2018, further highlighted the group’s “strong marketing capability” that “was demonstrated once again ahead of the highest profile betting event of the year, the Mayweather-McGregor fight in August”.
Corcoran finally addressed the health of the business he will leave new chief executive Peter Jackson, saying “the industry remains highly competitive and is exposed to regulatory risks, I believe the business’ scale, leading capabilities and market positions mean it remains well placed to deliver sustainable, profitable growth”.
The share price for Paddy Power Betfair spiked 4.9% to 8,085p at the time of writing.