Paddy Power Betfair to return £500m to shareholders Media Man Int

Paddy Power Betfair to return £500m to shareholders - May 2018

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After reporting dipping sales and underlying profits for the first quarter of the year, Paddy Power Betfair advised that it is returning £500,000 cash to shareholders, despite admitting that its 2018 profits may not be any higher than last year’s because of tougher regulatory environment in the U.K. and Australia.

CEO Peter Jackson, chief executive, said in a press release that the news represented “a step towards a more efficient capital structure, whilst retaining substantial strategic flexibility.” Shares in Paddy Power Betfair dropped 6.3% by mid-morning in London.

The Financial Times:

This month, the UK government is expected to slash the maximum stake that can be placed on fixed-odds betting terminals. The machines have been dubbed the “crack cocaine” of gambling because they allow punters to wager up to £100 every 20 seconds; that is expected to be cut to just £2.

The gambling industry has protested that such a reduction would pummel revenues, and force shop closures and job cuts. Paddy Power Betfair, however, has been more supportive of the change than some of its rivals.

On Wednesday, Mr Jackson said that although slashing FOBT stakes would be “a lightning rod for the industry”, he wanted “some certainty” on the government’s decision “so we can move on.”

In Australia, meanwhile, Paddy Power Betfair and its competitors are being hit with new taxes and more stringent advertising rules. The company’s revenues there in the first quarter fell to £408m, a 2 per cent decline on the same period in 2017. Its underlying ebitda declined 8 per cent to £102m.