Paddy Power's H1 profits race 12% ahead

Bookmaker Paddy Power today posted a 12% rise in half yearly half pre-tax profits and said it was on track to deliver 40% growth in operating profit for the full year, in line with forecasts.

The firm, which operates more than 200 betting shops in Ireland and Britain, reported profit before tax of €20.5m in the six months to the end of June, up 12% on the same time last year.

Basic earnings per share were 10% higher at 34.8 cents, with turnover up 27% to €878m for the half year.

'Our business has grown substantially in the first six months of the year,' commented CEO Patrick Kennedy. 'We look forward to the rest of the year and beyond with confidence,' he added.

Paddy Power said that the World Cup finals in Germany generated turnover of €48m, €37m of which related to matches played by June 30.

During the six months to the end of June, the amounts staked with the group across its three channels - retail, telephone and online - increased by 27% to €878m.  Gross win increased by 30% to €105m.

Paddy Power said that Irish punters had a 'bonanza' in the first six months of 2006. The company said they benefitted from its decision to introduce 'tax-free' betting with a once-off cost to the company of €4m. There was also a record haul of ten Irish winners at Cheltenham, an Irish winner at the Grand National, Ireland won the Triple Crown and Munster won the Heineken Cup.

Operating profits at the group's Irish retail divison was up 13% to €9.7m compared to the same time last year. The amounts staked grew by 16.2% to €414m. During the six months, Paddy Power opened four new outlets, bringing its total number of shops here to 154. It aims to open at least another six shops by the end of the year.

In its UK retail division, the group now operates 51 outlets. Operating losses increased to €3m from €2m the same time last year, which it said reflected the opening of 18 new shops.

The group's non-retail division comprises telephone betting, online betting and games. Operating profit from the division increased by 16.2% to €12.9m. This was made up of a contribution of €3.2m from the telephone channel, up 8.2%, and €9.7m from the online channel, up 19.1%.

The amounts staked with the telephone channel grew by 21% to €155m. The amount of customers using the telephone betting line rose by 18.6% to a total of 25,418.

Paddy Power reported 'strong growth' in its online channel in the first six months of 2006, with numbers using the service jumping by 80.2% to a total of 133,374.

The company said in its results statement that the business continues to grow strongly in the second half of the year, although as it often the case in the months of July and August, gross win percentages have been somewhat weaker than in the first half.

'Subject to the volatility that could arise from sporting results, the group remains on track to deliver its targeted operating profit for the year, in line with consensus market forecasts, which would represent about 40% growth on last year,' it added.

Paddy Power shares closed down five cent to €14.25 in Dublin this evening.