Paddy Power Profits Predicted to Plunge
The luck of the Irish may be running out.
Overnight, Gambling911.com had reported on the economic hardships facing Ireland in addition to one of the country's few bright spots - Paddy Power. Ireland's largest bookmaker is one of the few groups expected to deliver a yield of 5.1 per cent in 2009, according to Goodbody projections.
Monday came word that the bookmaking super power could be about to fall on some hard times itself.
Paddy Power has announced an increase in pre-tax profits by 7.9% in 2008.
The firm reported profits of £72m but expects that number to fall this year, as the recession deepens.
Paddy Power finance director Jack Massey said the sudden end of Ireland's economic boom will hit earnings and slow the expansion of their retail network this year.
He said: "We've benefited from the Celtic Tiger and, logically one would expect to see an impact when that slows down."
Mr Massey said the weakness of the pound and higher betting taxes will also hit the bookmaker's profits.
Online growth outside of the Irish republic could help prevent extensive losses, however. It was not immediately known where Paddy Power planned to expand its online services. The United States remained out of the question.
"As expected, online profits grew strongly, while retail was lower," analyst Liam Igoe at Goodbody stockbrokers in Dublin said in a research note. Paddy Power may benefit as rival betting shops close this year, said Igoe, who has an "add" rating.
Jagajeet Chiba, Gambling911.com
