Irish bookie chain Paddy Power plc has attributed considerable new business growth to a number of retail technology investments including EPOS and interactive TV as well as ongoing growth at its online and non-retail division, it emerged this morning.
For the six months ended 30 June the company reported an operating profit growth of 108pc to €40.8m. The company reported revenues of €143.7m, up considerably from the €104.9m reported in the same period last year.
While the company’s retail division saw amounts of €460.9m staked and accounted to revenues of €82.8m, the online division is catching up fast with amounts of €297.3m staked and delivering revenues of €45.6m for the company, up 48pc on last year.
Paddy Power chief executive Patrick Kennedy said that operating profits at its online channel increased by 53pc or €5.1m in the first half of 2007 despite heavy investment to expand online activities into new geographies like Germany and Spain.
Operating costs in the online division increased from €13.4m to €20.6m to account for human capital spend, marketing and promotion and the launch of new businesses.
“Customer numbers in the online channel continued to grow strongly with an 18pc increase at the end of the half year relative to June 2006, despite slower growth in sports book customers without the World Cup,” Kennedy explained.
“Online competition remains intense but we are confident that our brand, product range and top class customer service, as well as our continuous drive to increase our marketing efficiency, means we are well positioned for growth.”
Kennedy said that the aim is to continue to invest in people and technology to optimise customer acquisition and retention.
“For example, we added our newly developed affiliate management system to paddypower.com during the period, automating the process for other web site operators to promote our products on their websites.
“An Irish general election micro site also attracted political punters and media to our site and gave them a taste of Paddy Power early payouts when we paid out on Bertie Ahern to lead the incoming government before the count commenced.”
Kennedy said that as well as sports the online channel generates revenues from casino, games, poker and bingo. He added that during March the company migrated to a new software platform provided by a company called Playtech, which acquired its previous supplier.
In terms of new technological innovation at Paddy Power, the company revealed that it was the first major chain of bookmakers to sign up for Turf TV which allows punters to watch live racing fom every racecourse in Ireland and the UK without interruption.
“Our infrared shop television control technology and central production studio also ensures that the satellite information service and Turf TV pictures are seamlessly integrated,” Kennedy added, pointing out that 80pc of bookmakers in the UK do not have Turf TV.
He also pointed to significant efficiency gains delivered by the company’s new electronic point of sale (EPOS) system.
“This year’s Cheltenham Festival and Grand National were the first for many shops with EPOS and we were pleased with the improvement in customer service from speedier bet placement and collection, including the benefit of EPOS readable ‘mark sense’ dockets for shop coupons and press promotions,” Kennedy explained.
“We are also extracting more benefits by continuously refining and acting upon information from the system for operational management, marketing, risk and security,” he added.
By John Kennedy
