Betting: Revenues rise at pre-merger Paddy Power

The preliminary results represent the 2015 performance of Paddy Power prior to its multi-billion pound merger with Betfair, which went through in February.

Paddy Power, which has nine shops in Yorkshire and employs 50 people across the region, said operating profit was up 10 per cent to £139m.

Revenue at Betfair was up 21 per cent to £138m, driven primarily by 51 per cent growth in sportsbook stakes and improved football results, in the third quarter of the 2016 financial year.

Betfair also saw revenue in regulated markets up 31 per cent following a 27 per cent increase in the number of active customers. While gross earnings rose 10 per cent to £26m.

Breon Corcoran, chief executive of Paddy Power Betfair plc, said: “We were very pleased to complete the merger of Paddy Power and Betfair, creating one of the world’s largest online betting and gaming companies with enlarged scale, enhanced capability and distinctive complementary brands. These results show that both businesses entered this merger on the back of strong trading momentum.

“Our belief in the strategic rationale for the deal has only been strengthened following our early days as a combined operator. The combination of two industry leading operators, with aligned strategies and a strong cultural fit, is hugely exciting and the enhanced efficiency from operating at greater scale means we are well positioned to compete in both existing and new markets.

“The integration of the two businesses is progressing well and we look forward to capitalising on the opportunity we have to drive future profitable growth.”

Last year the two gaming firms agreed to merge in a deal said to be worth £5bn.

Paddy Power was founded in 1988 by the merger of three existing Irish bookmakers and it has become well known for its irreverent marketing style.

Its rapid growth in recent years has seen it build more than 300 betting shops in Ireland and the UK, and it now ranks as the third largest online bookmaker and sixth largest online gaming business in Britain and Ireland.

Betfair comes from a newer side of the bookmaking fence.

In 1999, professional gambler Andrew Black and city professional Edward Wray joined forces to form The Sporting Exchange, which went on to launch the Betfair Betting Exchange the following year, offering the market something of a revolution.

Its first market was the Epsom Oaks in 2000, but the new approach to gambling quickly took off by giving punters the chance to take bets and subsequently bet in play.

Betfair floated on the London stock exchange in 2010.

The tie up is part of a flurry of M&A deals in a sector where companies are responding to higher tax bills in Britain and tighter regulation by looking to bulk up and better compete in the fast growing online market.

Ladbrokes and Gala Coral also merged, creating a £2.3bn business, making it better equipped to compete in the growing online market.