Paddy Power CEO to Step Down Amidst Two Worst Weekends Ever in Football
Paddy Power, the United Kingdom’s third largest bookmaker, suffered two of its worst weekends in football on record this year. The company’s stock has dropped 4% and CEO Patrick Kennedy has announced his departure in 2015. Kennedy has been CEO of Paddy Power since 2006 with the betting firm enjoying huge success throughout much of his tenure.
Paddy Power, to its credit, has enjoyed a strong growth in sales during the first four months of this year. But two weekends in particular - January 11-13th and March 22nd-23rd of this year- managed to cause significant enough damage to the company's bottom line. Both weekends saw nine of the ten favourites in the Premiership win, resulting in Paddy Power having to pay out on all accumulator bets which tracked the favourites. Typically, on any given weekend, 54 per cent of favourites will win. All bookmakers were negatively impacted by these two weekends, it should be noted.
Looking to the full year, the company said that it expects the impact of the adverse sports results “to be largely offset by the impact of positive top-line momentum, the recycling of winnings by customers, favourable exchange rate movements and the later than expected introduction of the Irish online and phone betting tax.”
Let’s not forget the FIFA World Cup is just around the corner as well and this event pretty much represents a “cure all” for those companies experiencing financial adversity every four years.
Total online net revenue for Paddy Power grew by 1 per cent, with 12 per cent growth in eGaming/B2B net revenue while Mobile accounted for 54 per cent of the company’s total online revenue in April. Online stakes grew by 20 per cent.
And there is hardly a reason to shed any tears for Paddy Power just yet. The betting firm reported record pre-tax profits of €141 million for 2013.
As of May 11th, the group had no debt and net cash of € 264 million, or € 197 million excluding customer balances.
Mr Kennedy made his announcement Tuesday morning, saying: “I have loved every day of being Paddy Power’s chief executive. It is as fun and as interesting a job as anyone could hope to have, and I have had the privilege of working with some enormously talented and supportive people over the years that I’ve been here. I have always had a personal view that after ten years at the helm, change is good, both for the business and the individual. With this in mind, I have today given notice to the board of my intention to step down next April, the tenth anniversary of my appointment.”
- Aaron Goldstein, Gambling911.com
