Paddy Power Betfair Presents 2016 FinancialsPublished March 12, 2017 by Mike P
Paddy Power Betfair is a year into its merger and has just released financials for 2016.
Paddy Power Betfair had a reasonable 2016 after coming together in a colossal £7 billion merger that was years in the making. And the gambling group’s positive performance is framed against the backdrop of a 2016 that was hugely successful for players due to events such as the Cheltenham Festival, Euro 2016, and the US Presidential Election.
On 7 March 2017, Paddy Power Betfair reported to the London Stock Exchange that the group endured a £5.7 million loss for the year ending December 2016. Ultimately, Paddy Power Betfair was able to reveal that the group had to cover merger expenses of approximately £318 million.
Some stock exchange analysts cast their doubts after the reported losses, but Paddy Power Betfair was keen to highlight an 18% revenue increase as a barometer of success. Meanwhile, the gambling group actually surpassed expectations by securing a 35% rise in underlying earnings to £400 million, with analysts having forecasted £397 million.
Planned Cost Savings for 2017
After revealing those increases, Paddy Power Betfair took the time to state that the merger was actually ahead of its schedule. The group explained that this stems from the planned saving of £65 million worth of costs in 2017. To make the saving, Paddy Power Betfair has selected to cut its 7,200-strong workforce by 650 employees.
Moving forward, the group was eager to assure customers that Paddy Power and Betfair would continue as separate brands for providing an array of online and offline gambling services. However, the group did explain it would attempt to combine the back-office operations by placing both brands on the same technology platform.
Technology will continue to be priority focus for Paddy Power Betfair, with the group increasing its online revenues by 11% to £853 million in 2016. Comparatively, the 6% rise in revenue from retail betting shops was much less significant when considering the total value was £295 million in 2016.