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Bad weather, a string of Arsenal defeats and cancelled races, you name it, Irish bookmaking behemoth Paddy Power is pointing the figure following a 2% drop in revenue to £408m in the three months to 31 March.
A major snow storm, dubbed the "Beast From the East" led to the cancellation of about 400 horse races in the UK and Ireland between January and March.
The book was also hit hard by a string of Arsenal losses between November and February.
Arsenal won a mere two away matches in the Premier League during that period.
“Customers like to win,” a spokesperson for the bookmaker said. “If you have a sustained run of bookmaker-friendly results it will have a knock-on effect on customer activity.”
Underlying earnings in the first quarter fell 8% to £102m, with full year 2018 earnings to be lower than initially forecast at between £470m and £495m, below City expectations of about £500m.
Greg Johnson, travel and leisure analyst at Shore Capital, expressed disappointment with the first quarter performance. His firm lowered their recommendation from hold to sell.
“We do not believe that this slower growth and potential headwinds are fully factored into the [share] price,” he said.
Bookmakers have also had to deal with the possibility of a crackdown on the highly profitable fixed odds betting terminals in the coming months.
Revenue at Paddy Power’s Australian business, Sportsbet, rose 6% in the first quarter, despite adverse sports results.
“Sportsbet continues to perform well and is targeting further market share growth, with additional investment planned to take advantage of any disruption arising from market consolidation and the introduction of increased taxes,” Jackson said.
Not all the news surrounding Paddy Power was doom and gloom, however, as the company announced a return of £500m of cash to investors over the next 12 to 18 months through a share buyback program.
-- Aaron Goldstein, Gambling911.com
