Paddy Power cuts forecasts
Bookmaker Paddy Power yesterday slashed its annual earnings forecasts, prompting a slump in its stock market value as investors dumped shares in the Dublin-based company.
Winnings in favour of customers backing Irish golfer Padraig Hamilton at both the British Open and the US PGA championship as well as in almost two thirds of matches played at this summer’s European football championships, caused the betting business to lower full-year profit forecasts.
The group now expects to make an operating profit for the full year of €75m, compared to a previous forecast of €82m.
The company said that the change was largely due to poor gaming results as well as weaker consumer demand and lower margins since the last update.
However, Paddy Power claimed it remained confident in the UK market and that the downturn is simply part of the “swings and roundabouts” of the gaming industry.
A spokesman said: “We are still confident and happy to expand and have upped our UK shops target from 120 to 150 to reflect this. Profits at Paddy Power are still boosting just not as well as in the first half.”
Analysts are also positive for the company’s future.
Citigroup’s Richard Taylor said: “We still see excellent long-term growth for Paddy Power and history demonstrates the time to buy bookmakers is during periods of weakness and structural margin concerns.”