Paddy Power anticipates a fall in its operating profits for the year
Irish bookmaker Paddy Power has cited unfavourable football and horseracing results for an anticipated fall in full-year operating profits.
In a trading update for the period covering July 1 to November 17, the company said that its full-year operating profit for 2013 is likely to be around €11 million ($14.9 million) lower than the figure it forecast three months ago.
Paddy Power highlighted unexpected results in the Australian Spring Horse Racing Carnival and the Uefa Champions League club football tournament.
“We now expect low to mid single digit percentage operating profit growth in 2013 in constant currency, before currency translation headwinds of 3%,” Paddy Power said.
“This is approximately €11 million lower than the mid-point of our guidance at the time of our interim results.”
Paddy Power reported an operating profit increase of 12% to €75.4 million during the first half of the year, with its online division driving revenues up by 22%.
In addition, online sports turnover, excluding Australian operations, was up 15% on the corresponding period in 2012. Australian online revenue also grew by 26%, while retail increased by 5%.
Meanwhile Paddy Power has claimed that it has reduced the time required to upgrade its applications due to the rollout of open source, cloud automation tools.
According to the Computerworlduk.com website, Paddy Power rolled out its Opscode’s Chef automation tools in March of this year as part of a move to simplify configuration and deployment of server resources from its data centres running on a CloudStack platform.
The bookmaker said that this had helped to reduce the time needed to build, text and deploy applications.
John Turner, Paddy Power’s software development manager, said that while this process previously took days to complete, the new process can tackle it in a “matter of minutes”.
“For one of our back office systems we can provide an entire environment in ten minutes. This allows us to be more efficient in the way that we use infrastructure,” he added.
“Our release cycles in 2010 were described in months, and towards the end of 2012 these were talked about in weeks. Now we have the capability of releasing in hours.”
Turner also said that the reduced amount of manual intervention had shortened turnaround and cycle times of software releases, allowing the firm to focus more on the development process.
“[Chef] gives us the opportunity to iterate faster and therefore to innovate faster,” he added. “So where a competitor is innovating in a certain area and has stolen a march, it allows us to react to that much quicker than we have in the past.
“As we observe that marketplace becoming more dynamic, and our competitors gain an increased ability to react, we also need to make sure that we have the same or better capability as well.”