Commercial Property News

Paddy Power Plc, the multi-national betting and gaming group, today reported a near 18% fall in 2009 pretax profit but said it is confident in the underlying performance of, and prospects for the Group, raising the dividend 10% to 38.9c.

Revenue for year ended Dec. 31, 2009 was up to €295.93 million (2008: €283.66 million), but pre-tax profit was only €67.19 million (2008: 81.73 million) due to an adverse swing in the run of sporting results.

Paddy Power increased it's market share in Irish Retail to 32%, from 26%, but operating profit fell significantly to  €16.3 million (2008: €28.3 million).

By contrast there was continued profit growth in U.K. Retail to €1.3 million (2008: €1.2 million) with like-for-like EBITDA per shop in Great Britain up 7% to £120,000, and  a further  25 new shops were opened in the U.K., largest ever number in a single year, whilst also maintaining positive momentum in U.K. Retail profits. The UK now provides 44% of the total trading profits, while the recent Australian acquisition provides 20%.

In the UK, Paddy Power opened shops outside London for the first time, adding further to  knowledge for future opening and operating decisions, and taking their UK estate to 93 shops.  However, they still only have 1% of the UK Retail market (by shop numbers), which indicates the extent of the opportunit, and they remain on track to achieve their target of at least 150 shops in the UK by 2011.

Patrick Kennedy, Chief Executive, Paddy Power plc said:

'Despite the economic problems, 2009 was a cracking year for Paddy Power punters on two fronts.  The year saw a slew of punter-friendly sporting results which was the exact opposite to the experience of the prior year.  Also, Paddy Power once again invested heavily in bringing unsurpassed value to our customers through a range of 'stand out' offers.  This focus on value saw the Group drive up turnover and enhance market share across all channels by competing aggressively and attracting and retaining a record number of customers.

 On the development front we have taken significant steps in geographic expansion through the continued growth of our UK Retail network, the successful acquisition of Sportsbet and IAS in Australia and through a B2B online agreement with PMU to provide risk management and pricing expertise.

In recent months we have engaged with the Irish Government on the potential for taxation of telephone and online betting in Ireland.  In our view, such a tax will raise only relatively modest revenue, will be costly to implement and will be problematic, if not impossible, to enforce; points we have made to the Government with accompanying evidence.  We have nonetheless never had an objection to paying tax on the internet betting of Irish customers, assuming that any tax is enforceable on all internet bookmakers providing services to the Irish market and not just on those of us who are based in Ireland providing valuable sustainable employment.'