Revenue surged higher by 25%, 15% on a constant currency basis, to £404m, boosted by strong betting turnout around the Euro 2016 tournament and weaker sterling. Underlying earnings before interest, taxes, depreciation and amortization were also stronger than the previous year’s figure, up 53% to £113m.
The market responded positively to this news, sending shares in the company up 3.9% to 8915p.
The group’s chief executive Breon Corcoran proclaimed it had been “another good quarter” for the Irish bookmaker that is beginning to find its groove post-merger. Paddy Power’s merger with internet betting exchange company Betfair, which created the largest UK gambling company in February 2016, proved costly over the interim, generating a £49.3m pre-tax loss.
“We are continuing to focus on building a stronger combined operation by exploiting the unique assets and capabilities of each legacy business, and on using our scale to better serve our customers,” Corcoran explained.
Given the gaming industry heavyweight’s encouraging performance over the period, its full year profits guidance was raised from the initial figures between £365m and £385m to £390m and £405m.
The Share Centre investment research analyst Ian Forrest agreed that the third quarter figures from Paddy Power Betfair were promising.
“We continue to recommend the company as a ‘hold’ for medium risk investors seeking capital growth,” he said. “While both parts of the new group are performing well, and there should be further benefits to reap from the scale of the combined group, the shares already trade on a relatively high rating.
“For those interested in the sector, our preference is William Hill for higher risk investors due to the potential for further growth in mobile wagers, expansion into overseas markets and the prospect of further efficiencies within the business,” Forrest added.
Shares in William Hill were down this morning by 2.3% at 288.2p but it was not among the top twenty worst performers of the FTSE 250 at the time of writing.