Paddy Power Betfair shares down as figures fall in first quarter

Shares in Paddy Power Betfair ended Wednesday more than six per cent down after the bookmaker published disappointing figures for the first quarter of the year.

Increased cancellations of race meetings in Britain and Ireland, along with sports results, were blamed for the poor performance.

The headline figures for the three months to March 31 were all negative, with revenue down two per cent at £408 million, underlying Ebitda down eight per cent and underlying operating profit down 12 per cent year-on-year.

The firm also announced it plans to go ahead with a £500m buyback of shares.

Chief executive Peter Jackson was still positive despite the results, saying: "We have made good progress against our strategic priorities. In Europe the successful completion of our platform integration has resulted in a meaningful improvement to the Paddy Power product.

"This has seen the brand's gaming revenue returning to growth from February and a significant uplift in cash-out usage and in-running betting during the Cheltenham Festival.

"In Australia, Sportsbet continues to perform well and is targeting further market share growth, with additional investment planned to take advantage of any disruption arising from market consolidation and the introduction of increased taxes.

"In the USA, TVG and Betfaircasino.com have good momentum and we're continuing to make preparations for any positive regulatory changes."

Online revenue was down two per cent to £219m, with football growth offset by weakness in horseracing, with 14 per cent of all British and Irish races cancelled compared to four per cent in the same period last year.

Lost race meetings also contributed to exchange revenue falling seven per cent, while sportsbook revenues in retail fell ten per cent, with cancellations and the weather blamed again – Paddy Power's shops in Ireland were closed for two full days.

The firm also said results meant there was reduced recycling of winnings.

Jackson added: "Notwithstanding lower profits in the first quarter we expect full-year underlying Ebitda of between £470m and £495m.

"We're today announcing that we intend to return £500m of cash to shareholders, representing a step towards a more efficient capital structure, whilst retaining substantial strategic flexibility."

Analysts at Goodbody said there were positives and negatives among the results.

Gavin Kelleher added: "The revenue performance during the first quarter will come as a surprise, but it has to be viewed in the context of a number of one-off factors, namely weather and Australian sporting results."

Analysts at Davy said: "We believe that the update re-emphasises what many holders already knew; returning the group to double-digit growth is going to take time."

Paddy Power Betfair shares ended the day down 455p (6.27 per cent) at 6,800p.

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