In an interim management statement yesterday Paddy Power described 2009 as having been a year of significant developments for the company. Turnover and market share grew over all sectors and Paddy Power expanded internationally through successful acquisitions in Australia, continued shop openings in the UK and a B2B agreement in France.

Highlights of the year to date – 1 January to 16 May, 2010 – have been a very strong revenue performance in online with total gross win, excluding Australia, up 32%, and good bet volume growth across all channels. This has been achieved through significant investment, which will continue in order to maintain business momentum and a strong competitive position.

The Chairman of Paddy Power plc, Nigel Northridge, commented, “Following a run of adverse sporting results in 2009, I am also pleased to report that the Group’s sportsbook gross win percentages have returned to normal expectations in the year to date.” Online sportsbook amounts staked grew by 19% and bet volumes by 39%. Gaming gross win grew strongly by 32% driven by Games, Casino and Bingo which have benefitted from additional direct investment in product, people and promotion, as well as the strength of the Paddy Power sportsbook.

Irish Retail amounts staked decreased by 2%. On a like-for-like basis excluding new shops, bet volumes increased by 5%, amounts staked decreased by 5% and gross win decreased by 6%. UK Retail expansion continues on track with nine shops added in the period and recent openings performing well. On a like-for-like basis, bet volumes increased by 4% and total gross win (or net revenue) by 0.5%. Telephone bet volumes grew by 18% but a decline in average stake resulted in a 2% decline in turnover. Nonetheless, gross win grew strongly from the return to a normal gross win percentage. Telephone and like-for-like retail operating costs were flat in the year to date.

Australian amounts staked increased by 23% with online growth of 31% (both versus proforma comparatives). Online growth moderated slightly over recent months as the first anniversary of advertising deregulation has been passed. As at 30 April, before payment of the final dividend of €19m, the Group had net cash of €96m. This included customer balances of €37m and was net of €16m of debt in its Australian subsidiaries.

At Paddy Power’s Annual General Meeting in Dublin yesterday, Nigel Northridge summed up the outlook for the rest of 2010: “As a result of the strong momentum in the business, significant ongoing investment to enhance our competitive position, and the upcoming World Cup, the Board looks forward to the balance of 2010 and beyond with confidence.” (E-05.19.10)

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