Horse racing wipes out Paddy’s World Cup gains

Half-year results from gambling giant Paddy Power Betfair were not as dazzling as shareholders had hoped, despite its boss claiming that the business was finally getting its ‘mojo’ back.

Investors were left with the prospect of a reduced pot of gold, as Paddy Power lowered its earnings expectations for 2018 from a range of £ 470m-£ 495m down to £460m-£480m.

analysts at broker Peel Hunt said the reserved tone from management was hard to understand, since underlying earnings were up 1pc in the first half of the year and the second half had started ‘in line with expectations’.

But better gaming and a strong end to the football World Cup, which raked in total revenues of £45m for Paddy Power and £8m in profits, were cancelled out by weakness in horse racing revenues on the Betfair exchange, among other things.

Chief executive Peter Jackson said: ‘The World Cup was a showcase event for Paddy Power, with a series of successfully executed marketing campaigns leading to it being one of the UK’s most talkedabout brands in social media conversations.’

He was generally positive about the future, saying that the company now had a much better idea of upcoming regulatory changes in the betting industry across the UK, australia and the USa.

But shares still slipped 7.1pc, or 580p, to 7540p, following a path trodden last week by competitor William Hill whose shares took an 8pc dive. Profit before tax rose 4pc to £106m. Investec analyst alistair ross said the numbers were a ‘solid miss’, and added that he was disappointed that online growth had only hit 5pc.

Despite Paddy Power dragging it down, the FTSE 100 ended up 0.75pc, or 58.17 points, at 7776.65, as sterling refused to strengthen.

Just outside the blue-chip index, wealth manager Quilter, which recently broke away from angloSouth african bank Old Mutual, released its maiden set of results as a listed company. Shares crept up 0.7pc, or 1.02p, to 150.58p as chief executive Paul feeney hinted it still had more to offer.

He said: ‘While we have built a leading wealth management business, we are some way from demonstrating its full potential.’

Profit before tax rocketed 16pc to £110m, a record for the six-yearold company, while assets under management climbed 9pc to £116.5bn. But analysts at Numis said the results reflected a ‘mixed picture’. On the positive side, the 12p per share special dividend was higher than predicted.

But there were clouds in the sky – the £116.5m of assets under management was less than Numis expected, showing clients weren’t piling cash in quite so keenly. Hair and skincare company

Innovaderma, which owns the Skinny Tan and Charles + lee brands, was gleaming as it announced Tesco would start selling its new haircare range, roots.

Its shares bubbled up 21.6pc, or 24p, to 135p as it added the roots range had also been extended to include heat protection spray, conditioning spray and conditioning mask. roots has been around for a year and is already stocked in Boots and Superdrug.

But a crash was on the cards for construction engineering firm Hill

& Smith, which had 25pc, or 368p, wiped off the value of its shares, which closed at 1102p.

It makes metal items such as road safety barriers, but hit a bump as underlying profit dropped 12pc to £33m.

It blamed a cautious UK investment environment and volatile raw material cost, but aJ Bell investment director russ Mould slammed it for not moderating investors’ expectations sooner.