LONDON -- Paddy Power (LSE: PAP.L) revealed a healthy profit before tax of 68.7 million euros in its interim results today, an increase of 21%. Earnings per share was also a winner, up 25%.
The international betting and gaming company competes with Betfair, Ladbrokes and William Hill for the attentions of gamblers. Despite such competition, the company saw a net revenue growth of 29% with every division contributing double-digit growth.
The six months to June saw four new online ventures with start-up losses of 6.3 million euros, although strong growth was seen in the online marketplace. Customer acquisition was up 50% with active customers up 41% to 1.2 million, net online revenue was increased by 41% to 191 million euros and operating profit rose by 7% to 48.5 million euros. Both paddypower.com and Australia showed significant growth discounting the start-up losses.
Paddy power leads the mobile market with mobile net revenue up 239% to 53 million euros and 54% of customers transacting via mobile in June.
On the high street, Paddy Power saw U.K. Retail like-for-like sportsbook stakes up 12% and machine gaming net revenue up 5%. Operating profit was up 61% to 7.6 million euros, with 23 shops opened in the year to date. In Ireland, operating profit was up 79% to 9 million euros, although like-for-like stakes were down 3%.
Commenting on the results, Patrick Kennedy, chief executive of Paddy Power plc, said:
This has been a very strong first half for Paddy Power. Revenue growth in our existing businesses has accelerated with a 29% increase and each of the divisions achieving double digit growth. We strongly promoted our brand, products and Money-Back Specials during Euro 2012. This contributed to a 50% increase in online customer acquisition for the half year. We've also been busy on the development front with sustained investment, a successful launch into the Italian online market and three further new revenue streams set to contribute in the second half of the year. With our Online and Retail divisions both continuing to deliver substantial growth and our expansion plans progressing, we are confident in the Group's prospects for the rest of the year and beyond.
On the back of such satisfying results the group announced an interim dividend of 39 cents per share, an increase of 30%.
With healthy dividends and a strong balance sheet showing net cash of 186 million euros, Paddy Power looks to be in a winning position. Does this mean the betting and gaming sector could be worth a punt? Is this sector right for you or could there be better options? Find out what sectors we like in our special report "Three Top Sectors For 2012". It's absolutely free and provides some interesting insights.
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