ONE MORE THING:ON WEDNESDAY, it was very much a case of "winner alright" for Irish bookmaker Paddy Power after the release of a trading update and the announcement of the acquisition of a games software developer in Bulgaria.
Analysts busily upgraded their earnings figures for the company and its share price jumped 5.7 per cent in Dublin.
Sadly, it also gave a flavour of how the Irish retail business, once the star turn in Paddy Power’s stable, is now finding the going tough.
In 2007, at the height of the boom, Paddy Power’s chain of Irish bookmaking shops made an operating profit of €35 million. In the first half of this year it made €5 million.
Davy says that, based on recent trends, Paddy Power’s UK retail business will overtake Ireland in terms of profitability this year.
The company has 161 shops in Britain compared with 210 here.
“There’s an old wives’ tale that this market isn’t hit by the recession but it is absolutely hit by the recession,” chief executive Patrick Kennedy told me. “It’s one of the few sectors where people can pick their price point. The shops at an activity level have never been busier but the average stake per bet continues to decline and that’s the challenge.”
Kennedy estimates that Irish bookies will make an operating profit of €12-€15 million this year and cautions the Government against doubling the betting tax to 2 per cent.
“An 1 per cent betting tax would cost €30 million. So the sector would move from profits of €15 million to losses of €15 million. I think that’s pretty clear.”
What about the taxing of online revenues? “Our only view on online is make sure it’s a level playing field for whatever tax they introduce.
“Our concern is that an online tax is introduced and the guys who are based here and employing here play by the rules and pay the tax, and those offshore don’t pay the tax and enforcement of that becomes very difficult. It would just become a tax on Irish jobs.”
Kennedy said the profits from its online business in 160 countries are paid in Ireland.
It’s not just Paddy Power banging this drum. The Irish Bookmakers Association has made similar pleas in its pre-budget submission.
Does he reckon the Government is listening? “I hope so.”
On a more positive note for Ireland, it seems that Paddy Power won’t be joining the growing exodus of public companies emigrating from the Iseq index in Dublin for the London market.
“We’ve no plans in that regard . . . we’ve enough to be doing.”
