Paddy Power Betfair Says Revenue Fell in First Quarter

Paddy Power Betfair (PPB.L), a bookmaker and betting group, reported Wednesday that revenue declined in the first quarter along with operating earnings because of new betting taxes, levies and start-up losses in the US.

Reported sales fell to 408 million pounds ($561.5 million) during the three months that ended March 31, from 416 million pounds a year ago, the company said in its earnings statement. On a constant currency basis, revenue growth was flat.

The company attributed the decline in revenue to customer activity in the UK and Ireland being adversely affected by the “sustained period of bookmaker friendly sports results from November to February and a high level of racing fixture cancellations”. It further added that “good underlying growth in Australia was partially offset by adverse sports results”.

In line with lower sales, underlying earnings before interest, tax, depreciation and amortization also fell to 102 million pounds from 111 million pounds due to the “annualization of new betting taxes & levies and start-up losses in our US businesses.” Excluding these items, underlying operating earnings were flat.

Additionally, the company said it was planning to return 500 million pounds of cash to shareholders over the next 12 to 18 months, with the share buyback programme expected to be initiated “shortly”.

Looking ahead, the company said its full-year 2018 underlying operating earnings were currently forecast to come in between 470-495 million pounds.

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