Paddy Power Net Climbs on Web Bets, Long-Shot Wins
By Louisa Nesbitt

March 3 (Bloomberg)

Paddy Power Plc, Ireland's largest bookmaker, said profit climbed 52 percent in 2007 after more customers placed Internet bets and long shots won sports events such as England's Grand National horse race.

Net income rose to 62.8 million euros ($96 million), or 1.25 euros a share, from 41.2 million euros, or 81 cents, in 2006, the Dublin-based company said today in a statement. That beat the 59.1 million-euro average estimate of four analysts compiled by Bloomberg. Gross winnings, or the amount lost by gamblers, gained 28 percent to 279 million euros.

The bookmaker has added German- and Spanish-language online sports betting to boost sales at its Web unit. Gamblers usually back favorites, which helped oddsmakers when 33-1 shot Silver Birch won the Grand National in April. Many bettors also lost their stakes when the final of English soccer's FA Cup in May went into extra time before Chelsea beat Manchester United.

``The better-than-expected result is due to outperformance by the online division,'' analyst David Jennings at securities firm Davy said in a note. He described the results as ``strong.''

Paddy Power fell 15 cents, or 0.7 percent, to 21 euros at 8:48 a.m. in Dublin trading. The shares have declined 6.7 percent this year after advancing 50 percent in 2007, giving the bookmaker a market value of 1.03 billion euros.

More Winnings

Gross winnings rose 21 percent to 126.1 million euros at the bookmaker's Irish betting shops. Winnings from online wagers climbed 38 percent to 54.1 million euros, and the amount of money lost by bettors on telephone wagers gained 10 percent to 27 million euros.

``We've been helped by positive sports results in this period,'' Chief Executive Officer Patrick Kennedy told journalists on a conference call. The chance of repeating that kind of result is ``slim,'' he said.

Operating profit rose 51 percent to 72.1 million euros, the statement shows. That included growth of 57 percent at the Irish betting shops and a 300,000-euro profit at Paddy Power's U.K. outlets, compared with a year-earlier 6 million-euro loss.

The company plans to open outlets in London, Manchester and Glasgow and will more than double the size of its U.K. chain in the next three years, according to the statement.

Paddy Power is guaranteeing a 3 million-euro prize pool for this year's Irish Open poker tournament to help keep its brand in the public eye. The bookmaker also sponsored Tonga's national rugby team in last year's World Cup as well as the world's first festival dedicated to ``Father Ted,'' the television comedy about three Irish Catholic priests on a fictional island.

Paddy Power was created by the 1988 merger of three Irish bookmakers and began expanding beyond its domestic betting-shop business in 2000, when the company bought its first U.K. outlet. The Irish outlets now generate just under half of operating profit.

The bookmaker raised its second-half dividend to 35 cents a share, boosting the total for the year by 58 percent to 51 cents.