Paddy Power plc AGM - Chairman's Update Statement

Paddy Power plc AGM - Chairman's Update Statement

Trading for the 19 weeks to 10 May 2005

Group turnover has increased by 30% in comparison to the same period last year and turnover growth rates have been improving steadily throughout the business over the year to date. Turnover has increased by 19% in the retail division, 30% in the telephone division and 67% in the online division.

The first half of 2004 saw exceptionally strong bookmaking gross win percentages due to unusually favourable sporting results. As budgeted, 2005 has seen a return to a more typical gross win profile with total gross win being relatively
flat in comparison to 2004. This reflects the strong growth in both bookmaking turnover and gaming revenues offset by the lower gross win percentages on the bookmaking business. Gross win percentages have been mixed with satisfactory results in the first quarter while results to date in the second quarter are below average due to a high number of Irish trained horses winning in April. Overall gross win percentages are below the mid point of the annual ranges as of 10 May, particularly in the Irish retail division which has the highest proportion of horse racing business. No change is being made to guidance in the
expected annual gross win percentages ranges for each channel.

Gaming revenues have seen continued strong growth in 2005 driven by excellent development of the Online Casino and games product offering. We are pleased with the
development of the poker business which commenced in February 2005. It remains too early to accurately predict the impact of poker in 2005 but we continue to expect a small positive contribution for the year.

Expansion of both the Irish and United Kingdom retail estates has continued in line with plan with 144 and 32 outlets trading respectively and we remain confident of continued outlet growth in both markets. Opening of new outlets remains on track with a bias to openings in the third and fourth quarter in both countries. The group holds a total of 41 licenses in the United Kingdom.

The group remains confident about its growth prospects for the year. Half year and full year earnings should be in line with expectations assuming continued turnover growth levels and the achievement of normal gross win percentages for the remainder of the year. Earnings for the first half of 2005 should be close to those of the same period in 2004, reflecting 2004's very challenging
comparatives, while the company is well positioned for a strong second half

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