‘Different’ attitudes to Covid blamed for Paddy Power results

A “significant difference” in customer behaviour in the UK and Ireland following the Covid-19 pandemic has been blamed for a substantial disparity in the performances of Paddy Power’s retail revenues in the two markets.

The bookmaker's parent, Flutter Entertainment, reported third quarter results on Tuesday which showed revenue fell 5 per cent in Britain and Ireland due to the busier, higher profile sporting calendar during the previous year.

The decline in revenue was seen in both online and retail stores, with the latter down 6 per cent and the former down 5 per cent.

The damage to the company’s retail revenue can be traced to its Irish shops where there was a year-on-year decline of 27 per cent as against the UK where revenue rose by 9 per cent. There are about 350 Paddy Power shops in the UK and more than 260 in the Republic.

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The disparity between the two markets was attributed by Flutter to the “slower relaxation of Covid restrictions” here.

Divergence

Speaking after the publication of the results, Flutter’s chief financial officer Jonathan Hill said the UK “has moved on significantly” from the Covid-19 pandemic, but suggested this was something that is not observable here.

“We have seen a significant divergence in the performance of the UK and Ireland in terms of the retail estates,” he told The Irish Times.

“I don’t know if you have been over to the UK recently, but it feels like it has moved on significantly in terms of customer behaviour post-Covid and, having been in both Ireland and the UK, I definitely notice a significant difference.

“I think that’s what we’re seeing in the Irish retail shops at the minute – a lower footfall. Hopefully as we get back to more norms in Ireland, we certainly hope and would expect that we would get back to good levels of trading in the Irish estate.

“We are fully committed to the Irish retail estate and, having seen what’s happened in the UK, we just think Ireland is going to follow a little bit later in terms of customer behaviour.”

Mr Hill added that the UK performance has been “helped by the fact that we have gaming product in those retail shops”. He also described Paddy Power’s online performance as “absolutely fantastic”.

“We’ve seen it really doing well in its recreational customer growth so we’re really pleased with that,” he said.

Fury blow

Overall, Flutter’s results displayed strong underlying growth, but the company has nonetheless cut its guidance for the full year due to a run of unfavourable sports results in October and a temporary exit from the Netherlands following a change in regulations there.

It’s understood the company’s bookmakers were hit hard by the international football break on October 9th, when 14 of the 15 most popular selections were winning bets. On the same day, the “heavily backed” Tyson Fury knocked out Deontay Wilder in a boxing world title fight.

Bookies also lost out a fortnight later when 15 of the 16 favourites won their matches in the Champions’ League, while Liverpool’s 5-0 win over Manchester United was “a big win” for customers.

"While a run of customer-friendly results in October have resulted in win margins being below expected levels in the quarter to date, the underlying strength of our business is clear," said chief executive Peter Jackson in the results.

“We have grown our online recreational player base by 46 per cent in just two years. With more international jurisdictions and US states on the path to deregulation, we look forward to sustainably growing our global player base further in 2022.”

Flutter reported that sports revenue in the quarter rose 13 per cent to £906 million in the three months to the end of September, with total revenue up 9 per cent to £1.4 billion (€1.65 billion).

Group online revenue was up 13 per cent, with average monthly players up 13 per cent year on year.

The group has revised adjusted Ebitda expectations for its business excluding the US in 2021 to between £1.24 billion and £1.28 billion. Previous guidance was in the range of £1.27 billion to €1.37 billion.