Paddy Power Betfair's, earnings and revenue grew at a much faster rate in the second quarter but the bookmaker cut its full-year outlook due to the introduction of additional taxes and losses from its growing U.S. business.
Paddy Power Betfair warned in May that profit growth could stall this year after earnings fell in the first quarter on higher taxes and a subdued performance in its main European online business.
At that point, it guided for full-year underlying core earnings or EBITDA of 470-495 million pounds compared to 18% growth last year, when earnings came in ahead of expectations at 473 million pounds.
It said on Tuesday it expected underlying EBITDA of 460-480 million pounds, before the impact of U.S. sports betting, as recent positive trading momentum was offset by continued weakness in horse-racing revenues, new Australian taxes and the inclusion of the FanDuel daily fantasy sports operations.
Paddy Power Betfair agreed in May to merge its U.S. business with the fantasy sports company to target a market that is set to open up in the coming years.
Both revenues and underlying earnings, excluding changes in betting taxes and U.S. losses, rose 13% in the second quarter compared to a flat first quarter as the Irish-based firm reported a strong conclusion to the soccer World Cup and a better than expected performance in gaming.
"We have made substantial progress against our strategic priorities and trading in Q2 was good, with all brands and operating divisions contributing to the group's double-digit revenue growth," Paddy Power Betfair Chief Executive Peter Jackson said in a statement. (Reuters)