Bookmaker Paddy Power plans to open 12 new UK betting shops every year from 2003 on, it emerged yesterday.

The company, which already operates two betting shops in the UK, is to concentrate initially "in and around London" in its bid to tap into the €17 billion UK High Street betting market.

In the Republic, this High Street trade is worth just €1.3 billion. Paddy Power currently operates 127 betting shops in the Republic and two in Britain.

UK acquisitions are also on the cards, with Paddy Power deputy chief executive and group finance director Mr Ross Ivers confirming yesterday that the company was seeking to acquire a small chain - "something between five and 20 shops".

The company has already identified a number of premises in Britain and has applied for licences to open a number of new outlets in 2002 and 2003.

"In three or four years, we would love to have a stake in the UK the same as in Ireland," said Mr Ivers.

He was presiding over a record set of first-half results, which showed operating profit jumping by 127 per cent year-on-year to reach €9.1 million.

Gross profits came in at €38.8 million, up almost 40 per cent on the same six months last year.

Meanwhile, turnover rose by 55 per cent to €319.1 million, while cash held on the company's balance sheet rose by 61 per cent to €29.4 million.

Earnings per share were up 120 per cent at 16.3 cents.

The sound performance could be attributed in the main to a "return to normality" in the sporting world after last year's foot-and-mouth-related problems, Mr Ivers said. The World Cup also generated additional revenues, accounting for about 2 per cent of half-year profits, according to Mr Ivers.

All three divisions within Paddy Power were buoyant over the reporting period, with turnover in the company's online business - paddypower.com - soaring by 196 per cent to €41.4 million. The World Cup was crucial in this performance, with the site achieving its first €2 million turnover week during the month of June.

"We're very pleased with that," said Mr Ivers, particularly welcoming strong online growth in Britain. Sterling customers now account for 59 per cent of active users on the site.

The online division is on track to break even next year and is currently "contribution positive", according to Mr Ivers.

Strong growth also came in Paddy Power's telephone betting service, which has been actively marketed in Britain since January.

Turnover in this division grew by 168 per cent to reach €59.2 million over the first half, as customer numbers more than doubled.

Total betting shop turnover over the six months was €218.5 million, an increase of 28 per cent on the same period last year.

"Overall, we're extremely happy," said Mr Ivers, announcing an interim dividend of 3.4 cents per share.

"It reflects the confidence we have in the business," he said.

Looking forward, Mr Ivers cautioned against expecting similar growth in the coming six months, putting his best estimate at "low double-digit organic growth" as foot-and-mouth was eliminated from the equation.

Shares in Paddy Power closed at €5.37 in Dublin yesterday, gaining 12 cents to become one of the few risers on the day.