Paddy Power Uk Betting Operation

For many who have studied the recent results of bookmaker Paddy Power there are questions being asked about their UK retail operation as they continue to put a drag on profits which are doing just fine and dandy but the reatil devision in the UK is by the end of June this year, Paddy Power had 59 retail betting shops in the UK. Unfortunately, it is still losing money in the UK with first-half operating losses falling to €500,000 compared to €3m for the first half of last year.

For many it is felt that they should just get out of these shops and focus on the online operation as they are just minnows compared to the big three Ladbrokes, William Hill and Coral in terms of shops in the UK.

Paddy Power boss Patrick Kennedy has presided over a 65 per cent increase in the share price of the quoted bookie. However, with the company now valued at 25 times this year’s likely profits, Kennedy is going to find it difficult to maintain this rate of share price growth.

As its most recent half-year results show, Paddy Power is still dependent on its core Irish betting shops for 55 per cent of its operating profits. Meanwhile Paddy Power is generating about 36 per cent of its operating profits on-line with the remainder coming from its telephone betting operation.

While Kennedy deserves credit for virtually eliminating Paddy Power’s UK losses, you have to wonder if he is banging his head against a brick wall. Compared to the likes of Ladbrokes (2,100 betting shops in the UK), William Hill (2,250 shops) and Coral (1,500 shops), Paddy Power’s retail UK betting operation is strictly in the Mickey Mouse category. If he wants Paddy Power to keep its stellar share rating then Kennedy should flog off the UK betting shops and concentrate on the on-line betting instead.

Source: Irish Independant