Paddy Power entered merger with Betfair with “strong trading momentum” as it reports solid 2015 results
Paddy Power has reported strong results for 2015, leading it chief executive to state it and Betfair entered the merger with "strong trading momentum".
Paddy Power reported revenue up 24 per cent to €1.1bn (£850m) in 2015.
The bookmaker also reported operating profit of €180m, a 10 per cent rise. Operating profit was reported 50 per cent higher before the €66m in new taxes and product fees.
Meanwhile, diluted earnings per share rose 12 per cent to 332.8 cents per share.
And full year dividend was up 18 per cent to 180 cents per share.
Betfair reported revenue up 21 per cent to £138m for the three months ending 31 January 2016, while earnings before interest, taxation, depreciation and amortisation was up 10 per cent to £26m.
Why it's interesting
Paddy Power last month completed its merger with Betfair as difficult conditions hit the industry. The government has introduced a duty on online betting profits – the point of consumption tax – as well as a higher rate of duty on gaming machines found in betting shops.
Still, Paddy Power managed to post pre-tax profits up eight per cent, helping by strong online performance.
Read more: Paddy Power's operating profits to land at €180m as dividend announced
Operating profit rose even higher – and discounting new taxes would have risen higher still.
The bookmaker was given a hand from beneficial currency movements. Once these are factored in, profits were flat.
Read more: Behold, Betty Power: Paddy Power and Betfair agree merger
The merger between Paddy Power and Betfair (alas, not Betty Power) is not the only merger that's resulted from the harder times, with Ladbrokes having teamed up with Gala Coral.
Paddy Power Betfair have also been confirmed for promotion into the FTSE 100, and Breon Corcoran was positive about what the company can achieve, with opportunities to "drive profitable growth".
What Paddy Power said
Breon Corcoran, chief executive of Paddy Power Betfair said:
We were very pleased to complete the merger of Paddy Power and Betfair, creating one of the world's largest online betting and gaming companies with enlarged scale, enhanced capability and distinctive complementary brands. These results show that both businesses entered this merger on the back of strong trading momentum.
Our belief in the strategic rationale for the deal has only been strengthened following our early days as a combined operator. The combination of two industry leading operators, with aligned strategies and a strong cultural fit, is hugely exciting and the enhanced efficiency from operating at greater scale means we are well positioned to compete in both existing and new markets.
The integration of the two businesses is progressing well and we look forward to capitalising on the opportunity we have to drive future profitable growth.
Paddy Power reported strong results amidst the merger with Betfair as the companies prepare for entry into the FTSE 100.