Paddy Power Betfair plc has reported revenues ahead by 20 per cent in the US in its freshly published results for the six months ended June 30, 2018. Breaking down that figure, sports revenue was up 12 per cent, with gaming making up the remaining eight per cent. In its Q2 presentation, the firm’s stated priorities for the US market are to maintain fantasy sports and horseracing growth and achieve sports betting scale in key states.
Updating investors, 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 Q2 was good, with all brands and operating divisions contributing to the Group’s double-digit revenue growth.
“In the USA, we were delighted to add FanDuel to the group’s portfolio of leading sports brands, creating the industry’s largest online business, with a large sports-focused customer base and an extensive nationwide footprint. Our FanDuel sportsbook is now available in New Jersey and with our recent partnership with Boyd Gaming we’re looking forward to launching in further states as the legislation progresses.
“We now have much better visibility of the regulatory and fiscal changes in the UK, Australia and the USA, and believe that our scale, leading customer propositions and strong balance sheet mean we are well positioned to build a business that can generate sustainable shareholder returns over the long term.”
Headline figures
- H1 revenue up 7%, with Q1 flat and Q2 up 13% (up 9% in period pre-World Cup)
- Good Q2 revenue growth in all operating divisions: – Online: revenue up 13% with sports +12% and gaming +14% – Australia: revenue up 19% – Retail: revenue up 6% – USA: revenue up 20%
- H1 underlying1 EBITDA2 up 1% to £217m, or up 6% excluding changes in betting taxes & levies and losses in DRAFT (Q1 flat, Q2 up 13%)
- Net cash of £148m at 30 June; £201m returned to shareholders via dividends & share buybacks in H1 Strategic and operational highlights: • Good progress on returning the Paddy Power brand to growth
- Full year 2018 underlying EBITDA, pre-US sports betting, now expected to be between £460m and £480m, reflecting recent trading momentum, the introduction of additional taxes in Australia and the inclusion of losses from the FanDuel daily fantasy sports business
SBC Americas analysis: This is an encouraging set of half-year results from Paddy Power Betfair, one of a number of UK firms seeking to carve out some big numbers from the nascent US sports betting market. And just like its competitor William Hill US, the firm is looking well positioned right now to take advantage of the legislative shifts creeping across the nation. British invasion? Not exactly, but they appear to have gained the early momentum!
