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Real-Time news about Paddy Power (London Stock Exchange): 0 recent articles
At the current 21.88 share price, Paddy Power is valued at almost 1.05bn -- more than Glanbia, Aer Lingus or Greencore, the alma mater of CEO Paddy Kennedy (above).
With analysts forecasting 2009 operating (pre-interest) profits of 65m, Paddy Power is valued at over 15 times operating profits when likely year-end cash balances of almost 60m are stripped out.
That's not cheap. From my vantage point, the share price only makes sense if someone is getting ready for a crack at Paddy Power. If you believe that a deal is coming, hang on to your shares; if you don't, sell out now and take your profits|
|gizzimodo: And some response in the share price. Anyone interested should look at the website - they really are different to the competition.|
The growth pattern predates their (modest) online poker involvement by several years.
Sharescope shows it not having closed below its 200day eMA since autumn 2002 - ie stayed above it through the whole of 2003, the whole of 2004, and more. (28 consecutive months). Indeed apart from a brief spell below that line in 2002, and briefly brushing the line 3 times before that, it hasn't been near it in over 4 years since it came to market here - during which time the share price has grown fivefold.
In recent weeks it has benefited from a positive analyst comment or two regarding its continuing growth prospects. And it has always shown itself capable of absorbing the occasional run of losing bets that afflict all bookies now and then.
Its poker venture is not yet big enough to have contributed a lot, but the very mention of that word will perhaps have steered a few more investors into looking at this stock for the first time and discovering its merits.
|m.t.glass: 27 February 2005 By Ed Micheau
Bookmaker Paddy Power is expecting the 2005 Cheltenham horseracing festival to generate turnover of more than 30 million, an increase of 30 per cent on last year.
The Irish bookmaker will benefit from an additional day of racing at this year's festival, which runs over four days from March 15 to 18. The annual Cheltenham festival is the National Hunt calendar showpiece.
The turnover generated for Paddy Power by the Cheltenham festival has trebled over the last five years. Over a quarter of the 30 million betting turnover is expected to emanate from Britain, where Paddy Power is opening new offices in London.
The increased importance of the British market to the company is also reflected in buoyant improvements in online and telephone betting. Turnover from these two channels is expected to account for up to 40 per cent of the business conducted by Paddy Power during the festival.
The bookmaker will be hoping for a repeat of last year, when fewer favourites won races. This was in stark contrast to 2003, when ten out of the 20 winners at the festival were favourites, which contributed to the issue of a profit warning.
Paddy Power's share price closed at 13 on Friday, up 20 per cent since the start of the year.
(Sunday Business Post)|
|m.t.glass: For anyone who missed the news about Paddy Power's poker proposals, this Times article from a month ago explains http://business.timesonline.co.uk/article/0,,9070-1431141,00.html
They are dipping a toe in the water at nil risk initially - linking a limited number of their existing clients into casino sites run by others and collecting a percentage, until they see how it goes.
Share price meanwhile seems to have swept past the 1200 level without blinking.
It climbed about 50% last year and a little more than that (54%) the year before.
One of my most reliable longterm holdings.|
|cat: PAP a tip for 2005 from Kleinworts, out today:
Paddy Power is riding high with an impressive historical 5Y EPS CAGR
of 40%, which has driven a 2-year share price rise of 113%. We forecast
a 3-year EPS CAGR of 15%, fuelled by a continued Irish LBO roll-out, an
accelerated UK LBO entry and success online. Whilst the stock is on a
premium rating already, we believe further upside potential is justified.
Background: Paddy Power is the leading Irish off-track bookmaker, with
over 30% share of the Irish betting market. In addition, the group
operates profitable telephone and Internet divisions, which now
represent around 20% of 2004E group EBIT.
Impressive track record: The company's impressive 40% EPS CAGR
between 1999-2004E has been fuelled by a combination of factors,
including strong Irish economic growth, favourable changes to gaming
duty and corporation tax rates as well as the group's innovative business
model, continued LBO roll-out and strong performance online.
Forecasts: We expect this strong growth to continue, although the UK
LBO roll-out programme is unlikely to materially impact profitability until
2006. We forecast 15% EPS CAGR between 2004-07E, excluding
acquisitions and/or potential share buybacks.
Valuation: Paddy Power's track record and growth prospects, in our
view, justify the current 2005 P/E and EV/EBITDA premium ratings of
17.2x and 10.1x, respectively. Conservative DCF returns 12.20, 15%
upside. Our target price (DCF and multiples) moves from 10.60 to
|rcturner2: Can anyone explain what has happened to the share price of this company?|
|m.t.glass: Sunday Times
December 05, 2004
Judgment Day: Should you buy shares in Paddy Power?
Odds-on favourite to stay the distance
FOUNDED in 1988, Paddy Power is Ireland’s biggest firm of bookmakers, operating from more than 140 outlets in Ireland and 26 shops in London. These account for about 62% of its annual turnover with its burgeoning telephone and internet betting comprising about 19% each.
Turnover for the six months ended June 30, 2004, increased by 22.2% to €554.1m while its pre-tax profits increased by 158% to €18.7m. The company’s shares have had a strong run this year, rising by more than 50% to €10.88. It now has a market capitalisation of €544m.
The two experts below have been selected for their skills in several investment areas. They, or the funds they manage, may hold shares in the companies or sectors discussed.
Kevin McConnell, head of equity research, Bloxham Stockbrokers
STRONG earnings momentum and a solid, differentiated business model are the main drivers behind the Paddy Power growth story. Despite a considerable re-rating over the past 12 months and a premium valuation relative to its British peer group, we continue to believe that these drivers will support further share price upside over the longer term.
Although the bookmaking industry is subject to the inherent risk of short-term fluctuations in operating performance, Paddy Power has developed a strong track record. Supported by robust cash-flow generation and a solid balance sheet we expect the company to continue delivering on its organic growth potential. The group continues to reinforce its dominant domestic position while also expanding into the attractive British market where brand awareness is estimated to be more than 55%. The group last year introduced a dedicated management team in Britain and this should provide for greater focus and improved execution of the expansion strategy going forward.
Expansion of the retail estate will underpin growth going forward, while the group is also targeting significant volume expansion via non-retail infrastructure, particularly its website. The introduction of an online casino in March further expands the group’s offering in this regard.
Paddy Power is developing excellent earnings momentum and although the unusually strong interim gross win percentage is unlikely to be maintained for the full year, consensus expectations are for more than 50% earnings growth this year.
Trading at 18 times 2005 earnings, the premium valuation may appear excessive, but it is our view that the group’s solid business model and strong earnings growth potential justifies a premium rating.
Judgment: buy on weakness
Neil Osborne, equity fund manager, Davy Private Clients
PADDY POWER posted a very positive set of interim results in September, driven by volume growth across all three traditional channels and buoyed considerably by favourable sporting results. The company’s recently launched online casino also made a contribution of €1m to operating profits and this channel, which effectively generates 100% margin, is forecast to grow strongly.
Paddy Power’s strategy of appealing to the mass-market, entertainment-driven punter, who is less price-sensitive, has proved to be a big success in Ireland and a huge growth opportunity exists in transporting this formula into the burgeoning UK gambling market.
The roll-out of the licensed betting office estate in clusters across London is continuing in a measured manner. We estimate that about 25% brand loyalty exists in Britain and that there is a sizeable opportunity for Paddy Power to leverage its niche brand in the deregulated British market, which is 10 times the size of Ireland’s.
Given the high operational leverage of the online offering, much of the firm’s growth will come from establishing critical mass across this channel. Additional growth will come from the continued roll-out of fixed-odds betting terminals in Britain and the launch of additional peer-to-peer games such as online poker.
The shares have risen by 50% this year and the company now trades at a sizeable valuation premium to its peers.
We like the stock longer term but would advise caution as we think industry gross win percentages will trend downward toward mean levels over the next six months. Recent evidence from Ladbrokes and Stanley suggest this may already be occurring given recent punter-friendly soccer results. This may present investors with a more attractive buying opportunity in the future.
Judgment: buy at €10
THE FIRM AT A GLANCE
Share price: €10.88
Market value: €544m
Year end: December 2005
Forecast profits: €38.6m
Forecast dividend: 13.2c
Leading shareholders: FMR Corp 11.9%, David Power 10.4%, John Corcoran 5.4%, Merrill Lynch Investment Managers 5.1%
|m.t.glass: Share price has doubled in 18 months, and trebled in the past 3 years. Up 40% so far this year. (Same stats as NWF)
Grew 47.5% in 2001,
32.4% in 2002,
54.4% in 2003.|
Paddy Power share price data is direct from the London Stock Exchange