Paddy Power enjoys record results as mobile betting pays off

In spite of adverse sports results in the second half of the year, Irish bookmaker Paddy Power unveiled record annual profits as revenues grew in every division.Net revenue jumped 17% to €745m and pre-tax profit gained 5% to €141m, boosted by strong online and mobile performance.Chief Executive Patrick Kennedy said: "2013 was another good year for Paddy Power, with growth in every division and particularly strong growth in online which now delivers over three quarters of group profits."As active online customer numbers increased 19% to 1.9m, online sales advanced 21% to €473m and operating profits 10% to €108mKennedy added that the group continues to build out its industry-leading penetration in mobile sports betting and eGaming, with mobile net revenue powering ahead by 73% in 2013 and now accounting for over half of total online revenue. "Investment in mobile will continue to be significant in order to take advantage of our market leading position and avail of its exceptional growth potential," he said.In bricks and mortar retail, Paddy Power opened a record 67 new betting shops and now has over 500 units. In new geographies, the group steadily grew revenues in Italy, and signed a new B2B contract with Niké, the largest retail and online operator in Slovakia.The full-year dividend has been lifted 13% to 135 euro cents, with a proposed 11% increase in the final payment to 90 cents. Kennedy said the new financial year had started well from a turnover point of view with sportsbook stakes up 16%, although sports results had been mixed. "We're strongly positioned to benefit from the growth 'hot spots' in our markets and are investing accordingly. As a consequence, we look forward to 2014 and beyond with confidence."Broker Numis noted that "sporting results, FX and revenue investment in developing the business took the shine off the bottom line but we believe these pressures will reduce"."Paddy's recent offers on the [Oscar] Pistorius trial has been getting media attention - which is, of course, the point. 12% of Paddy's customer acquisition is through social media and such customers are, on average, worth twice the average. Paddy has more than 2m Facebook fans and Twitter followers."Numis said it believed the business continued to deliver attractive underlying growth, both in the core business and, particularly in developing markets in Australia and Italy, and reiterate its 'buy' rating and €74 price target.OH