Paddy Power Betfair has reported an 11% fall in full year pre-tax profits despite a 7% rise in revenues for the year to the end of December.

The bookies chain said its pre-tax profits for 2018 fell to £219m from £247m in 2017, while its revenues rose to £1.873 billion from £1.745 billion.

Earnings before interest, tax, depreciation and amortisation for the year amounted to £475m, at the upper end of its guided range of £465-480m.

Paddy Power Betfair said that the new year has started in line with expectations "with good momentum across our key divisions"

The company also said today it was proposing to re-name the group as Flutter Entertainment in May.

It said this reflected the increased diversity of its brands and operations which now include six consumer-facing brands - Paddy Power, Betfair, Sportsbet, FanDuel, TVG and Adjarabet.

The name change is subject to shareholder approval at the company's AGM later this year.

The company in May agreed to merge its US business with fantasy sports company FanDuel and in February bought a 51% stake in Adjarabet, an online betting and gaming company based in Georgia.

Paddy Power Betfair's board has proposed a final divided of 133 pence per share, taking the full year dividend for 2018 to 200 pence. 

Paddy Power's chief executive Peter Jackson said that 2018 was a challenging year for the sector with regulatory and tax changes. 

But Mr Jackson said the company's collection of challenger brands are well positioned in their local markets. 

"Paddy Power has regained its mojo, taking share following product improvements and some of our "classic" marketing," he said.

"Betfair, our unique combination of product that appeals to customers around the world, will be improved by our ongoing investments in languages and localisation," he added.

"In Australia recent tax changes favour the largest operators and we are determined to maintain our leadership position amongst the online bookies, using Sportsbet's leading customer proposition and generosity to continue to take market share," he stated. 

The Paddy Power Betfair CEO said that the new financial year has started in line with company expectations. 

"The acquisition of Adjarabet is further evidence that we are delivering against our strategy, and whilst there will inevitably be further regulatory challenges, we are excited about the growth opportunities ahead of us", he said. 

"With a growing portfolio of brands, we plan to rename the Group as Flutter Entertainment plc. There are no plans to use this historical name for consumers, and we will seek shareholders permission for the change at our forthcoming AGM," he added.

In its results statement, the company said its Retail division - which operates Paddy Power betting shops across the UK (362 shops) and Ireland (264 shops) - saw like-for-like revenues decrease by 2% and operating costs increase by 2%. 

It noted that revenue from its UK shops increased by 1% while Irish shop revenue decreased by 4% in local currency, but added that the business has consistently outperformed its competitors.

Paddy Power said that weakness in sports staking was driven by racing in the first half of the year, which was affected by a large number of weather-related cancellations, partially offset by good growth in self-service betting terminals (SSBTs) and football staking.

It also said the new £2 stake limit for gaming machines in the UK, which will apply from April 1, will not have a material impact on its sports-led retail strategy.

During the year, the company opened six shops, three in both the UK and Ireland, and closed four in the UK and two in Ireland.  

Meanwhile, the rate of betting duty payable increased in Ireland on January 1 2019.

The rate increased from 1% to 2% of sports betting stakes from Irish customers (applies to all channels) and from 15% to 25% of betting exchange revenues from Irish customers. 

It said that if these increased rates had applied to its Irish sportsbook stakes and exchange revenues in 2018 we would have paid an additional £20m of betting duty. 

Paddy Power Betfair said that revenue at its online operations increased by 5% to £948m. Online sports revenue increased by 3% with sportbook revenue up 6% and exchange and business to business revenue down 2%. 

It said the impact of sports results on the year-on-year growth across the full year was "immaterial", with more bookmaker friendly results in the first half of 2018 offsetting tough comparatives in the fourth quarter of 2017.

The company's Australia division - which operates the online betting brand Sportsbet - saw revenues increase by 6% to £403m. 

It said that 23% stakes growth was partially offset by a 150 basis point decrease in the net revenue margin, which reflected less favourable sports results and a significant investment in "promotional generosity".

The bookies said that pro-forma revenue at its US operations rose by 18%, with good underlying growth in each of its existing businesses supplemented by £11m of sports betting net revenue. 

Excluding sports betting, revenue was up 13%.

Betfair US merged with FanDuel last July and the group's US business now comprises revenues from the FanDuel fantasy sports (across 41 states); TVG horseracing (across 33 states); the FanDuel sportsbook (currently operating in New Jersey and West Virginia) and the Betfair Casino and Exchange in New Jersey.