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Paddy Power increased its marketing spending by 34%. Photograph: Alamy
Paddy Power increased its marketing spending by 34%. Photograph: Alamy

Paddy Power laughs off 20% fall in profits

This article is more than 9 years old
Bookmaker's results presentation makes light of payouts to punters that 'proved costlier than John Cleese's divorces'

The Irish bookmaker Paddy Power has attempted to laugh off its misfortunes in the first half of the year when a run of punter-friendly football results "proved costlier than John Cleese's divorce payments".

After announcing that profits dropped by 20%, the bookie pointed out that January and March were "dream weekends" for punters when 16, and then 17, out of the 21 most-backed teams won their matches.

The falling profits also came despite the six months including the first fortnight of the World Cup in Brazil and the bookmaker winning an extra €16.7m (£13.3m) from its customers, as its income for the half year rose to €396.5m. However, the bookie's costs also soared by almost 8% as it increased its marketing budget by 34% to €53.8m.

In its review of the year so far the bookmaker reminded shareholders where some of that marketing spending had gone.

"To analyse England's chances of success in Brazil scientifically, we commissioned everyone's favourite physicist, Professor Stephen Hawking. The media reaction was nuclear, including coverage in every UK and Irish national newspaper.

"We then caused outrage by appearing to have carved 'C'mon England, PP' into the Amazon rainforest – later revealing it to be a hoax image to promote awareness of deforestation with a carving in the same style of 'We didn't give the Amazon a Brazilian'. The story trended on Twitter with 35 million impressions and was the most read story on Reddit with almost a million views (displacing thousands of cat videos!)."

The soaring marketing spending represents a return of confidence at the bookmaker, which made its name with some outrageous marketing campaigns.

In 2005 it drew displeasure from the Vatican after pitching up in St Peter's Square and displaying odds for the papal election, which came 11 years after the group had offered punters 100,000-1 on Pope John Paul II being the next Glasgow Rangers signing. It then implied that His Holiness really had a chance of trotting out at Ibrox by refunding all bets after he slipped in the shower and injured himself.

Thursday's results statement added: "We never forget it is all about entertainment. Unlike Man United fans, we got immense enjoyment from David Moyes's tenure as manager. We put an 'In case of emergency break glass' encased Alex Ferguson wax model outside Old Trafford, positioned a 'grim reaper' in the crowd behind Moyes at Goodison Park (for what proved indeed to be his last match in charge), and erected a giant bronze statue of Moyes for services rendered – outside Anfield before the Liverpool versus Chelsea showdown."

The heightened marketing costs may have raised a laugh from observers but they caused pre-tax profits to fall to €61.6m from €77m. Still, the bookmaker remains confident for the second half of the year.

Patrick Kennedy, the group's chief executive, said: "We had a cracking World Cup which generated stakes of almost €200m, 130% ahead of the previous tournament. Australia continues to power ahead and Italy has made significant progress. The second half has started well with good stakes growth and a rebound in sports results."

The positive comments on the World Cup – the industry's largest event, which started poorly for the bookmakers before turning in their favour – echoes statements from rivals Ladbrokes and William Hill.

Shares in the Irish bookmaker slipped by 0.505 cents to €49.

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