Paddy Power announces record results

Irish bookmaker Paddy Power Plc today announced record results with growth across all divisions. The company reaped the benefits of its mobile betting platform and despite a poorer performance in sports betting over the second half of the year still managed to record net revenue up 17%.

The company showed a strong sportsbook growth with a large proportion now placing bets via mobile platforms. Also included in the results presentation is details of their continuing investment in new products and technologies which should leave the company strongly placed to take advantage of prevailing trends such as online, mobile.

Group Highlights:

- Net revenue1 of €745m, up 17%2 with revenue growth in every division;
- Record profit before tax, up 5%2 to €141m and diluted EPS up 2% to 252.0 cent, despite significantly adverse sports results in H2’13;
- Earnings growth also impacted by a €10m headwind from new product fees and taxes, currency depreciation and the first full year of investment in Italy;
- Dividend growth of 13% to 135 cent per share for the year proposed, with an 11% increase in the final dividend to 90 cent per share;
- Strong balance sheet with net cash of €172m, excluding customer balances of €57m, at end 2013.

 

Patrick Kennedy, Chief Executive, Paddy Power Plc said:

“2013 was another good year for Paddy Power, with growth in every division and particularly strong growth in online which now delivers over three quarters of Group profits.  We continue to build out our industry leading penetration in mobile sports betting and eGaming: mobile net revenue powered ahead by 73% in 2013 and now accounts for over half of total online revenue.  Investment in mobile will continue to be significant in order to take advantage of our market leading position and avail of its exceptional growth potential.”

“This year has started well from a turnover point of view with sportsbook stakes up 16% 2, although sports results have been mixed.  We’re strongly positioned to benefit from the growth “hot spots” in our markets and are investing accordingly.  As a consequence, we look forward to 2014 and beyond with confidence.”

Serco takes a hit in 2013 after Tagging Scandal

Security services company, Serco Plc reported a 62% drop in profits for 2013 after additional costs relating to the security tagging scandal with its UK government contract. The company paid £90.5m to settle claims it charged the government for tagging people who were either dead or in jail. The group paid a further £21m in other indirect costs.

On the positive side, revenue growth was up 5.9% for the group, though the company says outlook remains challenging, highlighting a reduced level of work for Australian immigration.

Ed Casey, Acting Group CEO, said: “We have been through a difficult year and there remains much to be done to ensure the agreed programme of corporate renewal is successfully implemented.  However, the work we have completed and the undertakings we have made demonstrate our commitment to achieve this.

“The events of 2013 absorbed management’s focus and, therefore, interrupted the normal process of improving efficiency and developing our business into new areas.  Over the second half of 2013 and until the end of January 2014 we were not able to be awarded new contracts by UK Central Government, which also had an impact on the development of our business in certain other sectors.

“Our focus is clear, to ensure that the Group has stable operations, appropriate operational controls and differentiated capabilities to make the most of the breadth of our offering across frontline and middle and back office services, and our referenceability from one country to another.  I am confident that these attributes will enable Serco’s return to growth in what remain fundamentally attractive service markets around the world.”

 

Ashtead Trading Higher on 50% pretax profit rise

Ashtead Group Plc, the international equipment rental company is a top riser on the FTSE100 this morning after reporting nine month and third quarter results. the groups figures show a jump of 50% in pretax profit for the period to a record £293m.

The results are underlined by strong revenue growth and an increased operating profit of £531.4 from £396.6 reported for previous period. Earnings per share are up to 36.8 pence from 24.4 pence.

The company now expects to exceed full year estimates and further growth to continue into the next period.

Ashtead Chief Executive, Geoff Drabble, commented:

“The business continues to have strong momentum, resulting in record nine month pre-tax profits of £293m, up 51% from the prior year. It is particularly pleasing to see both our divisions performing so strongly.

Our strategy continues to be focused largely on organic growth, supplemented by a range of bolt-on acquisitions. We invested £491m in our rental fleet and a further £85m on acquisitions during the period. Our markets remain strong and we anticipate growing the Group’s fleet organically in the coming year in the low to mid teens percent range. We remain committed to our debt leverage target of below 2 times EBITDA.

As a result, we now anticipate a full year profit ahead of our previous expectations and the Board looks forward to the medium term with continued confidence.”

Hiscox acquires singapore motor insurance firm DirectAsia

Hiscox, the specialist insurance firm today announced the acquisition of Asian online motor insurance provider DirectAsia.  In a deal valued at $55Million Hiscox will attempt to broaden its reach and take a short cut to markets in Asia. The group plans to invest significantly in DirectAsia in a bid to build its business and start selling Hiscox products via the platform.

DirectAsia was founded in Singapore in 2010 and launched into Hong Kong in 2012 and Thailand in 2013.  Its primary business is motor, one of the few non-discretionary insurances in Asia, with ancillary lines in travel, personal accident, healthcare and life. DirectAsia has a strong business model, operates in markets where agent based channels with high distribution costs predominate, and uses market leading rating mechanisms. It has over 54,000 customers, employs 140 people across the three locations in which it operates and in 2013 had gross written premiums of USD25.3 million.

Bronek Masojada, Hiscox CEO, commented: “DirectAsia is a challenger brand with real potential.  It gives Hiscox a 21st century distribution platform in Asia that leapfrogs traditional routes to market. DirectAsia complements our direct-to-consumer businesses in Europe and the US, and in time, we will use it to distribute Hiscox products.”

Anthony Hobrow, CEO Whittington Group, said: “We have developed a successful entrepreneurial business, taking on the global giants with traditional distribution models.  We are very pleased that we have been able to pass this unique platform to Hiscox who can supply expertise, capital and a strong customer focussed culture to help us further develop and grow the business.”

Amlin pretax profit Rises after decreased insurance claims

Insurance company, Amlin announced a rise in pretax profit for the last year of 23.3% helped by a decrease in insurance claims and premium growth.

Major catastrophe losses dropped to £18.5m last year from £152.3m in 2012, as the only notable large disaster in 2013 was the European flooding in May and June.

Highlights of the companies strong financial performance include:

·      Profit before tax up 23.3% at £325.7 million (2012: £264.2 million)

·      Return on equity of 19.8% (2012: 17.4%), above our estimated cost of capital of 8.5%

·      Combined ratio of 86% (2012: 89%)

·      Solid underwriting performance, with limited major catastrophe activity

·      Strong performance from Amlin London and Amlin Bermuda, with continued improvement from Amlin Europe

·      Frequency of European catastrophe activity impacts Amlin Re Europe

·      Average renewal rate down 2.1% at January 2014, with catastrophe rates decreased by an average of 8.4%

·      Excellent investment return of £160.4 million, equivalent to 3.6% on average invested assets
(2012: £165.3 million, 4.1%)

·      Dividend declared increased by 8.3% to 26.0 pence per share (2012: 24.0 pence per share)

·      Net tangible assets per share of 288.7 pence (2012: 259.8 pence)

Charles Philipps, Chief Executive commenting on the results said ”Our 2013 result is a testament to the strength of our talent and reinforces our capability and potential. With a number of businesses improving their performance, and our actions to drive profitability forward, we are well placed to continue to deliver good returns for shareholders.”