Online revenue at Paddy Power Betfair has declined by almost a third over the past four weeks compared with the same period last year, primarily due to the mass suspension of sporting events in response to the coronavirus pandemic.
In a trading update for the three months ended March 31st, the bookmaker's parent, Flutter, said overall group revenue for the quarter grew by 16 per cent despite the impact of sports disruption over the past month.
There was also online growth of 20 per cent for the period as a whole.
However, since the Covid-19 crisis forced the mass suspension of sporting events, sports revenue has fallen by 57 per cent, and by 65 per cent since the suspension of Irish racing from March 25th. Gaming revenue, however, has increased by 15 per cent.
In the four weeks from March 16th to April 12th, the company has dealt with declines to revenue in all its markets. All retail operations in Ireland and the UK have been suspended since March 16th and March 20th respectively, with no revenue as a result.
In Australia, revenue has reduced 7 per cent year on year with a limited impact from sports cancellations to date, reflecting continued racing behind closed doors.
Sportsbet is continuing to see good levels of customer acquisition, a result of the migration of retail customers to online with retail betting outlets currently closed throughout the country.
Salaries
US revenue is 8 per cent lower year on year, with a decline in sports revenue of 46 per cent but gaming revenue growth of about 200 per cent. Flutter said this reflected its expanded US gaming footprint and the continuation of some racing. Its racing coverage is increasingly being televised on US mainstream channels, introducing its TVG product to a new cohort of potential customers.
Flutter said it would continue to pay the salaries of its employees for now, but that the situation would be kept under review.
“Since mid-March a number of national governments have announced schemes of financial support,” it said. “We have concluded that for as long as possible, we will endeavour to fund the salaries of all of our employees through the group’s own financial resources. Should the duration of the crisis be such that not taking this support would jeopardise jobs, we will review our position.”
Overall in the quarter, Flutter said it enjoyed an “excellent revenue performance” from sport, driven by “strong active customer growth” in Australia and the US, “further boosted by bookmaker friendly sports results in all regions”.
In gaming, there was “good growth” in Paddy Power Betfair online, while the US continued to “exceed expectations”.
Since suspension of UK and Irish racing, group revenue has declined by 32 per cent year on year. A 46 per cent reduction in sports revenue is less than expected due to continuation of racing in Australia and the US.
Group net debt position at March 31st was £240 million (€276 million), with undrawn facilities and available cash of £460 million (€530 million).
Flutter chief executive Peter Jackson said the company was working hard to support its employees during this period.
Widespread cancellation
“Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US,” he said. “Gaming continues to perform well across the group.
“We are also working hard to provide all the support we can to our employees and I would like to thank them for their ongoing commitment and support for each other during this difficult period.
“While the current disruption is truly exceptional, it underlines the importance of product and geographic diversification.
"As such, the strategic logic of our combination with The Stars Group remains compelling. Following approval of the deal yesterday by the Irish Competition and Consumer Protection Commission, we look forward to completing the transaction in the second quarter upon receipt of outstanding shareholder and regulatory approvals."
