Results round-up: Paddy Power Betfair, Intertek, Worldpay, Just Eat

Newly merged bookmaker Paddy Power Betfair said the new financial year has started in line with expectations as it reported a 35% rise in underlying earnings before interest, tax, depreciation and amortisation to £400m and a big dividend payout.

The company said group sportsbook stakes in the year to date were up 22%, with online up 13%, Australia 47% and retail up 15%.

Underlying revenues were up 18% to £1.5bn and the final dividend of 113p a share results in total dividends for the year of 165p a share.

Stautory pre-tax profits fell to £12 from £124m.

Revenue growth included a £78m benefit from the plunge in the pound. On a constant currency basis, revenue growth was 11%.

“Sports revenue growth was driven by a 24% increase in sportsbook stakes. During the year, sports results ebbed and flowed between favouring bookmakers and customers,” Paddy Power said.

“The first quarter saw a high number of favourites winning at the Cheltenham festival, before unfancied results at the Euro 2016 (football) tournament boosted revenues in June and July.”

“The year concluded with customer friendly football results in December. Across the year as a whole, the overall group sportsbook net revenue percentage was broadly in line with the prior year but was marginally lower than our normal expectations.”

The company said it expected to take a £6m annual hit from August when the UK treatment of free bets for online gaming point of consumption tax will change to bring it in line with their non-deductibility for sports.

Intertek

Intertek saw full-year 2016 sales rocket 18.5% to £2,567m as weakness in the pound continued to bolster its top-line.

The testing, inspection and certification specialist also reported a 8.9% organic sales increase to £2,321m, although at constant exchange rates that was reduced to a rise of just 0.1%.

Acquisitions added £242m to the total revenue figure, with management telling investors the company would continue to carry out M&A to strengthen its portfolio in "the right growth" areas.

Operating margins rose by 30 basis points to 16.0% at constant exchange rates. The full-year dividend was hiked 19.3% to 62.4p with the company committing to a dividend payout ratio of circa 40% of earnings.

"We believe Intertek remains a quality business, and has demonstrated the ability to generate high returns on invested capital, albeit these have declined in recent years," Numis analyst Steve Wool said in a research note sent to clients the previous day.

However, some observers believed the company's financials were now less transparent given changes in the reporting structure.

Worldpay

Electronic payments processor Worldpay posted its final results for the 2016 calendar year on Thursday, with the company seeing a 14% rise in transactions to 14.9 billion, as total transaction value rose 12% to £451.1bn.

The FTSE 100 firm said total revenue rose 15% to £4.54bn.

Both net revenue and underlying EBITDA were also up 15% at £1.12bn and £467.6m respectively, with the company swinging to 6.6p earnings per share from 1.8p losses per share in 2015.

Its reported profit before tax was £264.1m, a significant improvement from £19.1m in 2015, and free cash flow also substantially increased to £170.9m from £32.4m.

The board confirmed a total dividend per share of 2p.

“We had a very strong 2016, both in terms of financial performance and strategic progress, and we're starting 2017 better placed than we've ever been,” said chief executive officer Philip Jansen.

“The substantial investments we've made in leading edge technology, innovative products, deep market reach and talented people are delivering real benefits for our customers, and our momentum with them is in turn further increasing our confidence in delivering our medium-term growth ambitions.

Just Eat

Just Eat’s 2016 revenue and earnings surged as it seeks to capture further share of the online food delivery market.

Revenues surged 52% in 2016 to £375.7m, compared to last year, and were up 46% on a like-for-like basis, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 93% to £115.3m.

This resulted in a 164% increase in pre-tax profit of £91.3m.

The underlying EBITDA margin rose 700 basis points to 31% and the basic earnings per share increased 182% to 10.7p.

FTSE 250 listed Just Eat said that it aims to capture further share of the £23.1bn of delivered food ordered in its markets and that in 2017, despite more investment, it expects material growth in both revenues and underlying EBITDA of between £480-495m and £157-163m, respectively.

The strong results were due to a 42% rise in orders to 136.4m, or up 36% on a like-for-like basis, processed orders worth over £2.5bn for Just Eat’s restaurant partners and a 31% increase in active users to 17.6m.

More than 50% of Just Eat’s UK orders were processed through Orderpad, its tablet-based order platform, ahead of the company's target to have a third of UK orders processed through the app by March.

Last year, the company bought businesses in Italy, Spain and Mexico as part of its overseas expansion strategy and in December 2016 it said it will buy SkipTheDishes in Canada and Hungryhouse in the UK, subject to approval by the Competition and Markets Authority.

Chief executive David Buttress said: "2016 was an important year operationally, positioning the business very positively for the future. We continued to invest in our technology, brand and people to expand the choice we offer consumers and the benefits we deliver to our restaurant partners. Our markets remain relatively under-penetrated, meaning there is considerable runway to generate sustainably profitable growth across the business.”