Paddy Power Betfair revenue boosted by weaker pound, Cheltenham

Paddy Power Betfair reported an 87% rise in first-quarter earnings as revenues were boosted by the weaker pound and favourable results at Cheltenham.

In the three months to the end of March, underlying earnings before interest, taxes, depreciation and amortisation rose to £111m from £59m the year before, with revenue up 23% to £416m, or 15% higher in constant currency. Revenue included a £23m benefit from the translation of non-UK revenues due to a weaker pound.

Meanwhile, operating profit more than doubled to £91m from £42m.

The company said growth was driven by sports, with sportsbook stakes up 18% and margins up 1.3 percentage points.

Online revenue was up 15% to £224m, mostly thanks to a 33% increase in sportsbook revenue, which was underpinned by improved sports results and 13% growth in online stakes.

Retail revenue increased 23% to £82m, while excluding the impact of new shops and currency movements, like-for-like revenue was up 16%.

Chief executive Breon Corcoran said: "Reversing the trend of the past two years, results at Cheltenham 2017 favoured bookmakers and this contributed to good revenue growth. Combined with the annualisation of merger-related cost savings and continued focus on operating efficiency, this resulted in a doubling of operating profits in the first quarter.

"Since then, however, at high profile events such as the Grand National, Premier League football and the US Masters, results favoured customers, and overall gross win margins were weak in April.

"A key strategic focus for 2017 is the integration of our technology platforms. This project is on track and we expect both our European brands to be operating on a common platform by the end of the year, at which point customers will start to benefit from increased pace of new product delivery."