Shares in Paddy Power continue to climb after its preliminary financial results revealed that the Irish gambling giant made record profits before tax of €167 million and that it plans to return up to €392 million to shareholders.
At time of writing, shares in Paddy power are trading for more than €75 each, valuing the company at more than €3.6 billion.
The company’s net revenue increased 18% to €882 million with pre-tax profits growing 21% to €167 million. These impressive figures were helped by the number of bets placed at Paddy Power increasing by 16%, the vast majority of which were placed at Paddy Power’s online operation, which is responsible for some 77% of the group’s operating profit.
Recently appointed Chief Executive of Paddy Power Plc, Andy McCue, said of the results:
“2014 was an excellent year for Paddy Power with robust double digit growth in stakes, revenues and profits, and a marked increase in customer acquisition. We are strongly positioned in the key growth areas of online and mobile, whilst also benefitting from a differentiated and resilient retail presence. Our distinctive brands and deeply rooted marketing capability are core assets.
As I look ahead, the pace of change in the sector and in the wider consumer environment is intensifying. We continually develop and adapt to anticipate the needs of customers and maintain an edge in the market. Time and again we see that product is the key factor in attracting and retaining customers. We have re-organised the business to significantly sharpen our focus on product differentiation and innovation, and to increase in-house development. This, combined with clear investment priorities, will pave the way for sustained performance and market leadership.
This year has started well, including a positive impact from recent euro depreciation.”
Paddy Power is currently sat on €285 million in cash, of which €67 million is customer balances. The company plans to move its current position of net cash to a position of net debt and that would enable it to return approximately €8 per share or €392 million in aggregate to shareholders.
The management team at Paddy Power are confident of continued success in 2015 thanks to sportsbook stakes being up 18% like-for-like and the company benefiting from a depreciation of the Euro, something that could see them profit to the tune of €5 million.
Lead image courtesy of the Paddy Power blog