Paddy Power eyes bumper World Cup as profit guidance dents shares

By Padraic Halpin

DUBLIN | Wed Aug 28, 2013 4:28pm BST

DUBLIN (Reuters) - Irish bookmaker Paddy Power held out the prospect of bumper takings from next year's soccer World Cup after full-year profit guidance for 2013 disappointed investors.

Shares in the group, hit by punter-friendly results in what is a quiet year for major sporting competitions, were down 0.3 percent at 59.9 euros by 1514 GMT, continuing a falling trend from highs above 70 euros earlier in the year.

Davy Stockbrokers cut its rating on Paddy Power to 'underperform' in late April when its shares traded at 67 euros, saying fair value was 57.80 euros. The stock has since fallen 11 percent.

Paddy Power, which has posted stellar top-line profit growth in recent years, said on Wednesday that operating profit rose 12 percent to 75.4 million euros (64 million pounds) in the first half with revenues up 22 percent, driven by the group's market-leading online division.

The Dublin-based group said it was on track for low- to mid-double-digit full year operating profit growth in constant currency terms.

Chief Executive Patrick Kennedy forecast turnover from the 2014 World Cup of over 100 million euros, compared with 86 million in 2010, and expected the competition to deliver a major boost to its new business in soccer-mad Italy.

In contrast to rival William Hill, which suffered a slow start to its expansion into Australia, turnover at Paddy Power's Sportsbet brand grew at its fastest rate to date with profit and customers also growing by over 30 percent.

The bookie, which is set to be hit by new betting taxes in Ireland at the end of 2013 and Britain a year later, is seeking to capitalise further on fast-growing online and smartphone markets which now account for over 75 percent of its profit.

This week it begins trialling the first real money sports betting product on Facebook with a view to rolling it out across the social network in a matter of weeks.

"For operators who get this right, it is an enormous opportunity," Kennedy said.

(Editing by David Cowell)

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BoE's Bean - Guidance is clear signal on interest rates: report

The Bank of England is seen in the City of London August 7, 2013.

Credit: Reuters/Toby Melville

LONDON | Mon Aug 26, 2013 10:19am BST

LONDON (Reuters) - The Bank of England is sending a "clear signal" that interest rates are not likely to rise imminently with its new forward guidance plan, Deputy Governor Charlie Bean said in an interview published on Monday.

The central bank is "communicating not just to market participants, but to people, to households and businesses, to give them a clear signal that interest rates are not likely to rise imminently," Bean told Bloomberg.

"What we're trying to do is explain as clearly as we can, what are the factors that will guide policy going forward, recognising the world is an uncertain place," he said, adding he was "a little bit" surprised at the reaction to the plan in financial markets which have pushed up yields on British government bonds

(Writing by Li-mei Hoang, editing by William Schomberg)

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Bank of England's rate guidance aims to boost confidence - Bean

The Bank of England is seen in the City of London August 7, 2013.

Credit: Reuters/Toby Melville

LONDON | Sat Aug 24, 2013 5:28pm BST

LONDON (Reuters) - The Bank of England's decision to provide explicit guidance on the path of interest rates was motivated by the desire to give consumers and firms more confidence to spend, deputy governor Charlie Bean said on Saturday.

It was not primarily designed to inject more stimulus into the economy, he said, but it should reduce the risk of a premature rise in market interest rates jeopardising the recovery.

"The guidance is intended primarily to clarify our reaction function rather than to inject additional stimulus by pre-committing to a time-inconsistent 'longer for longer' policy path," Bean said.

"Nevertheless, by reducing uncertainty about our behaviour, we are aiming to encourage households and businesses to spend and invest."

Bean is only the second Monetary Policy Committee to speak publicly since Mark Carney, the central bank's new chief, announced the bank would not raise interest rates before unemployment fell to 7 percent.

Bank projections show this threshold is unlikely to be hit before 2016, but money markets show investors are betting UK rates could rise a full year earlier.

Bean, who typically represents the majority view on the nine-strong committee, acknowledged that market rates had risen rather than fallen since the introduction of "forward guidance" - a move he said reflected a string of good news on Britain's economy.

But he said the unemployment threshold "by serving as a reminder of just how much growth is needed to regain lost ground" should temper the extent of any tightening.

Bean did not comment on whether the recent shift in rate expectations was justified but warned investors against assuming that all central banks would remove stimulus at the same time.

"Although synchronised movements in bond rates is unsurprising given the high degree of substitutability between relatively safe sovereign bonds, synchronisation at the short end of the yield curve is not warranted if cyclical positions differ," he said.

(Reporting by Christina Fincher; editing by Ron Askew)

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