DUBLIN (Reuters) - Paddy Power PAP.I will keep its Italian business following a review of the operation and said the group had made a good start to the year with strong revenue growth offsetting unfavourable sports results.
Paddy Power announced the review in March as part of the first set of results presented by new chief executive Andy McCue after experiencing slower-than-expected growth since entering the Italian market in 2012.
The Irish bookmaker said it expects its Italian losses to fall this year and next, before substantially eliminating losses and moving to profitability.
"We have identified substantial operational improvements and we see the market as attractive over the medium to long term," Chairman Nigel Northridge, whom the group announced will be replaced by outgoing Smurfit Kappa CEO Gary McGann, said in a statement.
Paddy Power, which has more than doubled annual profit since 2009 via overseas expansion and a stronger online performance than rivals, said revenue had grown by 28 percent this year, driven by strong growth online and in Australia.
It added that a weaker euro this year had helped offset the impact of new taxes and regulations levied on the betting industry.
"This is the strongest Paddy Power statement that we can recall reading in some time, Net revenue growth is running ahead of expectations across all four main business channels," Davy Stockbrokers wrote in a note, saying it would review its full-year earnings forecast.
Reporting by Padraic Halpin; editing by Jason Neely