nderlying profit before tax for the group was up 15% to 56.8 million euros, however online was the main driver with 81% of Paddy Power’s earnings before tax generated online, gross win up 28% to 143 million euros and operating profit up 25% to 45.3 million euros. UK retail saw a 59% rise in operating profit to 4.7 million euros, however Irish retail operations continued to be hit by the economic situation there with operating profit down 44% to 5.1 million euros, driven, according to the Dublin-headquartered company by “adverse sports results”.
Jack Massey, finance director at Paddy Power, told eGaming Review online was the main driver between the UK, Ireland and Australia with active customers on paddypower.com up 48%, and gross win up 35% to 101.1 million euros. “We’d always describe it as a combination of product, value and brand. In product I’d pick mobile out. We were early to the market with mobile and continue to enhance it and improve it. We’ve added Blackberry to the platform and Nokia are coming down the track and it’s now a key product for bettors,” he said.
“The sportsbook is where the most traction is. Last month 37% of active customers of online sportsbook on paddypower.com were transacting all or some of their business via mobile. Gaming, everyone’s at an earlier stage of development, we now have 11 games live on the iPhone,” he added.
Since acquiring Australian online bookmaker Sportsbet on 1 March this year, as well as its existing June 2009 acquisition of local bookmaker International All Sports (IAS), the Irish group saw strong profit growth with operating profit up 25% to 9.8 million euros and added in a statement to the stock exchange this morning that it is planning “initiatives to drive further growth”.
Including legacy telephone operations, total gross win in Australia was up 5% in constant currency to 48 million euros. Overall sportsbook gross win percentage increased in the period to 7.4% but was below the operator’s expectations of around 7.9% due to adverse sporting results in the AFL, Australian racing and NRL, it said. Online active customers were up 16% in the period, with 20% growth in active customers within sportsbet.com.au. The percentage of online customers transacting via mobile in Australia is up from 5% in May to 20% in July.
“The combined businesses are working very well,” added Massey. “They’ve just done a deal with Fox Sports with their coverage of AFL, rugby union and AFL. The other big change was where we migrated both Sportsbet and IAS to the Openbet platform that we use ourselves which was completed in July. The group also invested in 75 additional personnel in Australia including Paddy Power marketing director Barni Evans who moved into a new internal role focused on Sportsbet and IAS.
Massey added that one of the H1 highlights was the company’s Champions League final money-back special offering customers their bets back if Barcelona beat Manchester United. “There was good promotion and brand work around that. The photo shoot with Imogen Thomas at the height of the [Premier League footballer] super injunction was featured on the front page of the Sun with the making of the shoot the most watched video on YouTube that day. It’s nice to see the brand working well off and online and we continue to invest heavily in it.
Massey added that Paddy Power was the biggest advertiser “of any industry” on Sky Sports in the first half of this year but did not disclose the amount spent. The group’s total marketing spend in the first half of this year was “just shy” of 29 million euros, according to the FD, 12% of the group’s gross revenues. “Spend was up 17%, a good increase but disproportionate to the growth we’ve seen. It’s a significant amount of money but we feel the brand works well and it has a personality,” he added.