Irish gambling giant Paddy Power saw almost 8% of its value wiped out after the company issued a profit warning on Tuesday.
As the Irish Stock Exchange closed on Monday, shares in Paddy Power ended at €62.50, but this price tanked to €57.45 on the back of news that full operating profit would be approximately €11 million less than previously reported.
Paddy Power Plc issued an Interim Management Statement that said: “The Group’s overall underlying performance has been good in the period; however sports results have been unfavourable.”
Performance has been solid, with its online sportsbook (excluding Australia) seeing a 15% increase in amounts staked and a 17% increase in Gaming/B2B net revenue. Amounts staked in its UK betting shops increased 5%, the same increase in its Irish retail shops. However, online sportsbook revenue tumbled by 11% with total net sportsbook revenue in its UK and Irish betting shops falling by 2% and 4% respectively.
Paddy Power blamed the poor revenue figures on unfavourable sporting results.
“Sports results have remained poor. The Group experienced particularly unfavourable results in July, as disclosed at the announcement of our Interim Results. Since then, adverse sports results have further reduced gross win versus our normal expectations by some €10m, with notably poor results at the recent Australian Spring Racing Carnival and on Champions League football.
“We now expect to achieve low to mid single digit percentage operating profit growth in 2013 in constant currency, before currency translation headwinds of 3%. This is approximately €11m lower than the mid-point of our guidance at the time of our Interim Results.”
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It was not all doom and gloom for the Irish firm as figures coming from its Australian arm went from strength-to-strength with massive growth in its online division. Amounts staked increased by 26% with total net revenue from Australia rising by some 23%.
The Group is also in a strong financial position with no debt and €235 million in cash, or €171 million when customer’s balances are subtracted from that figure.
As this article was published, Paddy Power’s share price had started to recover and currently stands at €57.78.