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Thursday, 24 January, 2019

Outgoing Paddy Power boss Corcoran calls for more clarity over FOBTs

Outgoing Paddy Power Betfair chief executive Breon Corcoran
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The government's announcement on FOBTs this week did not provide the clarity Paddy Power Betfair had hoped for, outgoing chief executive Breon Corcoran said on Wednesday.

Corcoran was speaking as the company revealed its third-quarter trading update with revenue and Ebitda both up on the same period in 2016 boosted by a strong international performance. Paddy Power Betfair ended the day as the top performing share on the London stock market, closing up 345p at 8050p, a rise of 4.48 per cent.

In September Corcoran broke ranks with his rivals when writing to gambling minister Tracey Crouch calling for stakes on FOBTs to be reduced to £10 or less when the government published its review.

Read the full trading update

He said the subject had become "toxic" to the industry and that lack of decisive action would lead to continuing uncertainty for the sector. However, the government has instead laid out a number of options for FOBT stakes followed by a 12-week consultation. 

In a statement on Wednesday, Corcoran said Paddy Power's retail operation, in which revenue was up 12 per cent to £85m, "continues to outperform the market through its sports-led proposition and is well positioned to respond to regulatory changes".

Later he told analysts: "Our views are in the public domain. We have sought long-term certainty and clarity. Yesterday doesn't deliver that but hopefully we will get there at the next stage."

The bookmaker reported that revenue jumped by nine per cent year on year to £440m, while underlying Ebitda increased to £121m, up seven per cent compared to last year.

Much of this was driven by strong performances in Australia and the US, with revenue up 29 per cent and 18 per cent respectively. However, online revenue fell by three per cent to £216m, although that was compared to a period containing part of the Euro 2016 football tournament. Full year underlying Ebitda was expected to be between £450m and £465m

Corcoran also praised Paddy Power Betfair's marketing stunts, which included Floyd Mayweather wearing the bookmaker's green underpants during the weigh-in for his bout with Conor McGregor in August.

He said: "Quarter three was an encouraging quarter with good stakes growth despite the absence of a major football tournament.

"The group's strong marketing capability was demonstrated once again ahead of the highest-profile betting event of the year, the Mayweather-McGregor fight in August. Paddy Power's infamous lucky pants were on [Mayweather] at the weigh-in."

Corcoran will hand over the reins at Paddy Power Betfair to Peter Jackson on January 8, bringing to an end his highly successful period as chief executive of the bookmaking giant, which included the £6 billion merger of the two companies.

He added: "In the new year, I will hand over leadership of the group to Peter Jackson and, while the industry remains highly competitive and is exposed to regulatory risks, I believe the business's scale, leading capabilities and market positions mean it remains well placed to deliver sustainable, profitable growth."

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We have sought long-term certainty and clarity. Yesterday doesn't deliver that
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