Ahead of its preliminary results on March 7, Paddy Power Betfair announced a post close trading update for Q4 2016.
The group revenue in 2016 was up 18 per cent year on year to £1.551bn. Since the group’s Q3 trading update, it continued to see good sportsbook staking growth. This started with the unexpected US election outcome, which cost the group almost £5m, and concluded with its European sportsbooks losing money on football bets in the month of December.
The company estimates that the impact on revenue from the customer friendly results, before any benefit from the recycling of winnings, was approximately £40m in the quarter. The impact on profitability of these results was partially offset by lower than expected marketing and staff costs.
In the company’s online division, the adverse sports results, coupled with some weakness in gaming, meant that Q4 revenue reduced by three per cent year on year, despite 15 per cent growth in sportsbook stakes.
The benefits of the group’s geographical diversification were highlighted by a strong performance from Sportsbet in Australia, where Q4 stakes growth of 25 per cent and revenue growth of 18 per cent (both in local currency) helped to partially offset the poor gross win margins in the European businesses.
