Paddy Power Betfair share price: Underlying EBITDA in line with guidance

UK-listed gambling operator Paddy Power Betfair says the tiny hands of US President Donald Trump made a dent in its Q4 earnings

UK-listed gambling operator Paddy Power Betfair says the tiny hands of US President Donald Trump made a dent in its Q4 earnings

Group revenue in FY2016 was up 18% year on year (+11% in constant currency, "CC " 2) to £1,551m.

In addition, the operator said that group underlying earnings before interest, tax, depreciation and amortisation should come in at the mid-point of its guided range of between £390 million and £405 million.

Revenue for the three months ended December 31, 2016 totaled £388 million, up 10% from the same period a year earlier. Sports betting revenue accounted for the greater portion of the whole. Moreover, a weak performance from its online division saw a 3 percent year-on-year fall, despite a 15 percent growth across sportsbook stakes.

The sports growth comes despite the firm having suffered from unfavourable results in the quarter, with customer-friendly results estimated to have cost the company £40 million in Q4 alone. Similarly, annual collective revenues rose by 18 percent to £1.55 billion.

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Paddy Power Betfair, which was formed out of the merger of Paddy Power and Betfair in February a year ago, said it had seen good sportsbook staking growth - but results favoured its customers, beginning with the USA election results, which cost the group nearly £5m. A series of "customer friendly" wins from football teams like Chelsea during the Christmas period, led to the losses. The company said it partially offset this decline via "lower than expected marketing and staff costs".

However, it said it had continued to see good growth in stakes placed on sports bets despite results "favouring" customers.

Paddy Power Betfair's online division reported poorer-than-expected results for its online division.

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