Underlying EBITDA in line with guidance despite adverse sports results

Ahead of its preliminary results on 7 March, Paddy Power Betfair plc (the “Group”) today announces a post close trading update for the three month period ended 31 December 2016 (“Q4 2016”) and the year ended 31 December 2016 (“FY2016”)¹.

Group revenue in FY2016 was up 18% year on year (+11% in constant currency, “CC”²) to £1,551m. We expect full-year Group underlying EBITDA3 to be around the mid-point of the previously guided range of £390m to £405m, notwithstanding worse than expected gross win margins in November and December.

Since our Q3 trading update, the Group continued to see good sportsbook staking growth but results favoured customers. This started with the unexpected US election outcome, which cost the Group almost £5m, and concluded with our European sportsbooks losing money on football bets in the month of December. We estimate that the impact on Group revenue from the customer friendly results, before any benefit from the re-cycling of winnings, was approximately £40m in the quarter. The impact on profitability of these results was partially offset by lower than expected marketing and staff costs.