Publishing its preliminary results for the 12 months to December 31, 2018, gaming and betting operator group Paddy Power Betfair reported steady growth despite challenging conditions, not least in its home UK market.
Revenue grew in 2018, to £1.87bn, up from £1.74bn in 2017, with the group reporting strong digital revenues of £948m (up from £898m), combined with an underlying digital EBITDA of £316m (2017: £306m).
In a statement, Peter Jackson, PPB Group CEO, said: “I’m really pleased with the way that the group performed in 2018 in what was a challenging year for the sector with regulatory and tax changes.
“Our collection of challenger brands are well positioned in their local markets. Paddy Power has regained its mojo, taking share following product improvements and some of our ‘classic’ marketing.”
The operator reports an underlying EBITDA of £451m, falling short of its corporate EBITDA target of £465m to £480m, largely due to significant US investments, such as the Betfair US merger with FanDuel.
“The opening of the US online sports betting market has the potential to be the most significant development to occur within the sector since the advent of online betting,” continued Jackson.
“Rather than announcing our plans, we have moved quickly to give ourselves the best chance to win in that market. We are confident that FanDuel’s nationally recognised sports brand, eight million customers, our group betting expertise, and our market access partnerships position us very well.
“Our success to date supports this view, with FanDuel achieving a 35 per cent online market share in New Jersey in its first five months of operation, and Meadowlands becoming a marquee venue for sports betting.”
The US is a key part of the group’s growth plans. PPB’s international expansion will be led by four strategic pillars, the company reiterated:
- Maximise profitable growth in our core markets
- Grow Betfair in the rest of the world
- Attain podium positions in additional regulated markets
- Pursue the US opportunity rigorously
Referencing the group’s many brands, which increased this year with the FanDuel deal and the recent acquisition of Georgian bookmaker Adjarabet, the CEO revealed plans to rename the PPB as Flutter Entertainment, reviving an earlier betting-exchange brand (Flutter.com) that was acquired by the Betfair in 2002.
Said Jackson: “With a growing portfolio of brands, we plan to rename the group as Flutter Entertainment plc. There are no plans to use this historical name for consumers, and we will seek shareholders permission for the change at our forthcoming AGM.
“The new financial year has started in line with our expectations. The acquisition of Adjarabet is further evidence that we are delivering against our strategy, and whilst there will inevitably be further regulatory challenges, we are excited about the growth opportunities ahead of us.”