Supermerger Good: Paddy Power-Betfair Grow in Q1 As Well

Supermerger Paddy Power-Betfair has reported robust growth for Q1.

Core Growth

The company reports that its four core brands have turned in 16% year-on-year growth, with figures that serve as a salient reminder of the appeal and profitability of iGaming industry in general, as well as the respective stakeholder value of merging.

Massive Totals    

The reported total revenues for group revenue in the quarter ending March 31, 2016 turned in can only be described as staggering: £339 million (€429.2 million/$493.9 million), in an industry were operating costs are minimized in the online environment.

The Breakdown

While maintaining well-earning physical betting parlors, online revenue is responsible for the growth in the merger model currently offering games from Paddy Power, Betfair, Sportsbet and TVG.  An online revenue jump of 17% year-on-year to £195 million was driven in large part by a 23% jump in sportsbook stakes, compared to smaller growth contribution from retail (5% to £67 million).

Promising Global Contributions  

Two large economies of scale are also starting to contribute as well.  Australian revenues jumped 25% year-on-year to £58 million. Meanwhile, the goldmine US market expanded 22% to £20 million, with the majority of that coming from New Jersey where Betfair was able to bring an established holding into the power merger. 

EBITDA

Earnings before interest, tax, depreciation and amortisation jumped 27% to £59 million.  Operating profit was up 36% to £43 million as well.

Looking Forward Confidently

As far as the next benchmark, Group CEO Breon Corcoran identified Euro 2016 as the organisational focus of marketing, technology and operations through the important spring racing period build-up:

“The post-merger integration is on-track; a strong leadership team is in place and restructuring of the business has commenced.”

Complementary Fit Key

Corcoran praised the complementary skills and holdings of the two merger members, indicating the new company is “working to bring the best of each business to the combined group.”  Those benefits are already being passed along to customers in new product features rolled out across all brands.

Strong Industry

While the regulation landscape moves gradually, the accelerated growth of individual operators and the success of recent high profile mergers such as Betfair and Paddy Power provide undeniable testimony to the sustainability, growth and overall profitability of the iGaming model and market.