Paddy Power Betfair enjoys profit boost as the bookie shrugs off new £2 stake limit on gaming machines
- Group’s profits rose by 4% in the firs half, while revenues climbed 7%
- Forecast for the second half lowered, knocking share price
- Shares slip by 2.5 % to 7,915p following the update
Paddy Power Betfair’s profits rose by 4 per cent to £106million in the first half of this year, the group’s latest results reveal.
The bookmaker said it does not expect the government’s new £2 stake limit for gaming machines to have any ‘material impact’ on its operations.
While the group’s revenues increased by 7 per cent year-on-year in the first half to £867million, its shares are trading down 2.5 per cent or 210p to 7,915p.
Boost: Paddy Power Betfair’s profits rose by 4 per cent to £106million in the first half
The company has declared a dividend of 67p per share, up from 65p a share a year ago.
Michael Hewson, chief market analyst at CMC Markets UK, said: ‘It would appear that a cut in the company’s average forward guidance estimate for the second half of the year has prompted this morning’s bout of profit taking.’
Following its deal with US-based FanDuel, Paddy Power Betfair said its underlying earnings look set to come in between £460million and £480million, down from an estimated range of £470million to £495million.
The group’s chief executive, Peter Jackson said: ‘It has been a busy and successful few months for Paddy Power Betfair.
‘We have made substantial progress against our strategic priorities and trading in the second quarter was good, with all brands and operating divisions contributing to the group’s double-digit revenue growth.’
The group took an £8million hit from changes to betting taxes implemented in Australia last year.
Back in May, Paddy Power Betfair announced a £200million share buyback programme.
‘Between 30 June 2018 and 6 August 2018, 0.9m shares valued at £78m were repurchased’, the group said.
The company said it plans to enter into an additional £300million share buyback programme after the previous £200million scheme has finished.
In the UK, bookies have been warning about the impact of a recent government move to slash stakes on fixed-odds betting terminals to £2 a time.
William Hill, which makes more than half of its retail revenues from FOBTs, said in May that the ‘unprecedented’ decision could see around 900 of its betting shops become loss-making.
Limits: In the UK, bookies have been warning about the impact of a recent government move to slash stakes on fixed-odds betting terminals