Paddy Power Betfair hikes dividend as revenue and profit rises

Caitlin Morrison
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Paddy Power and Betfair joined forces last year (Source: Paddy Power Betfair)

Paddy Power Betfair has reported increased revenue and profit for the first six months of this year.

The figures

Underlying revenue rose nine per cent to £827m from £759m in the first half of 2016.

Underlying operating profit was up 22 per cent to £180m, from £148m, and earnings per share grew 23 per cent to 181.1p, from 147p.

The company hiked its dividend by 25 per cent from 52p to 65p.

Shares in the group dropped three per cent to 7,310p at the open.

Why it's interesting

Today's results follow yesterday's announcement that Paddy Power Betfair's chief executive Breon Corcoran will be replaced by Worldpay boss Peter Jackson. The news caused the bookmaker's share price to drop by more than six per cent.

The company said this morning that although the gambling industry "remains highly competitive and exposed to external factors including the economic and regulatory environments... we believe that the investments we are making, as well as our scale, market positions and leading capabilities, position us well for sustainable profitable growth".

The second half of the year has started in line with expectations, Paddy Power Betfair said, and full year underlying earnings before interest, taxation, depreciation and amortisation is expected to be between £445m and £465m.

What Paddy Power Betfair said

"We continue to make substantial investments to position Paddy Power Betfair as a structural winner in a dynamic and highly competitive market," said Corcoran.

"The focus of this investment is to use technology to improve efficiency and minimise the cost of servicing our customers and to further enhance our customer proposition.

"The integration of our technology platforms is on track for completion by the end of the year and will bring significant benefits including increased quantity and pace of new product development in 2018 and beyond."

Corcoran said: "Ahead of that, our customers and shareholders are already seeing benefits from efficiencies and investments. In the first half alone, customers enjoyed approximately £30m of extra value through better odds, more generous offers and new loyalty benefits."

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