Publishing its preliminary full-year 2017 results, FTSE100 betting group Paddy Power Betfair Plc (PPB) reports strong growth across its core metrics and KPIs, as the company delivers on key merger projects and initiatives.
Completing year 2 as an enlarged enterprise, PPB reports a 13% increase in group revenues to £1.7 billion (FY 2016: £1.5 billion), driven by a 16% growth in 2017 sports wagers.
Aided by favourable football results recorded during the Q4 2017 period, PPB was able to outperform its 2017 earnings guidance (target £450m -£465m), declaring an underlying group EBITDA of £473 million (FY 2016: £400 million).
Closing its full-year 2017 accounts, PPB governance declares underlying group operating profits of £392 million, up 19% on 2016’s £330 million.
The FTSE betting group reports a strong balance sheet with an underlying free cash flow up 57% to £395 million.
Updating investors, PPB governance was pleased to announce the successful integration of its combined group platform project completed this January. Moving forward group tech resources will now be focused on the ‘development of customer-facing products’.
PPB governance further highlights the strengthened position of its international assets/divisions within Australia and US, which the company states are ready to tackle expected regulatory changes for 2018.
Surpassing 2017 expectations, PPB has been able to free up circa £20 million of budget for new marketing campaigns and customer propositions which will be delivered this 2018 primarily for UK and international growth.
For its short/mid-term trading, PPB governance targets a group leverage of between 1x and 2x net debt to EBITDA, seeking to improve the efficiency of the Group’s capital structure
Presenting his first trading statement as enterprise leader, Peter Jackson Group CEO of Paddy Power Betfair detailed;
“The business saw continued good growth in 2017, with operating profits increasing by 19%. Our Australian and Retail operations performed particularly well, growing profits by over 40%.
Following the successful completion of our European technology integration, Paddy Power customers are now enjoying the fastest sportsbook app in the market. Our considerable development resources will now be focused on bringing more new products to customers, some of which will be delivered ahead of the World Cup.
We saw the benefits of investing in our customer propositions in 2017, with Sportsbet launching a number of product features that give extra value to customers and Betfair moving to a clear market leadership position in its football pricing.
Now the Paddy Power brand is operating with an improved product, we will increase marketing spend to align with its mass market positioning and step up the retention-focused investment that we started in 2017. At the same time, we also plan to increase our investment in international markets.
Our scale, leading customer propositions and strong balance sheet mean we are well positioned ahead of the regulatory and fiscal changes expected in the UK, Australia and the USA. Our strengths in operating efficiently and responsibly will enable us to build a business that can sustainably generate shareholder returns over the long term.”