PPB targets new World Cup features after beating 2017 forecast

PPB targets new World Cup features after beating 2017 forecast

Friday, March 9, 2018 Posted by Luke Massey
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Sports betting growth contributed to a 13% rise in group revenues

FTSE100 betting group Paddy Power Betfair Plc (PPB) has beaten market expectations for its 2017 corporate performance. 

Publishing full-year 2017 results this week, PPB reported a 13% rise in group revenues to £1.7 billion (FY 2016: £1.5 billion), boosted by the accelerated growth of its sports betting division.

Replicating industry trends, PPB operations were aided by favourable football results recorded during the Q4 2017 period.

Closing its 2017 accounts, PPB outperformed its 2017 earnings guidance (target £450m-£465m) by declaring an underlying group EBITDA of £473 million (FY 2016: £400 million), combined with a group profits of £392 million (FY 2016: £330 million).

Furthermore, the FTSE enterprise reported a strong balance sheet with an underlying free cash flow up 57% to £395 million.

Detailing operational highlights, PPB stated that it had completed the final piece of its group merger integration, delivering its new combined group digital platform this January.

Moving forward, the company stated that it will focus tech resources on “the development of customer-facing products”.

Updating investors, PPB revealed that through its streamlined strategy, the company was able to ‘free-up’ circa £20 million in budget, which it will reinvested in developing new marketing campaigns and customer loyalty programs for its Paddy Power brand.

Presenting his first trading statement as CEO of Paddy Power Betfair, Peter Jackson said: “The business saw continued good growth in 2017, with operating profits increasing by 19%. Our Australian and retail operations performed particularly well, growing profits by over 40%.

“Following the successful completion of our European technology integration, Paddy Power customers are now enjoying the fastest sportsbook app in the market. Our considerable development resources will now be focused on bringing more new products to customers, some of which will be delivered ahead of the World Cup.

“We saw the benefits of investing in our customer propositions in 2017, with Sportsbet launching a number of product features that give extra value to customers and Betfair moving to a clear market leadership position in its football pricing.

“Now the Paddy Power brand is operating with an improved product, we will increase marketing spend to align with its mass market positioning and step up the retention-focused investment that we started in 2017. At the same time, we also plan to increase our investment in international markets.”

Totally Gaming says: It was a successful first trading statement for new Group CEO Peter Jackson, who has prioritised the revitalisation of the Paddy Power brand. A focus on “the development of customer-facing products” will tie in with Jackson’s World Cup plans for the Irish operator.

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