Paddy Power Betfair expects faster cost savings from merger

DUBLIN, Aug 24 (Reuters) - Paddy Power Betfair (LSE: PAP.L - news) expects to deliver cost savings a year earlier than expected as a result of its merger after reporting a 31 percent jump in first-half earnings as a combined entity.

Online betting exchange Betfair and Paddy Power (EUREX: 27913021.EX - news) , which operates shops as well as online, completed a 6 billion pound ($7.90 billion) merger in February.

At the time, it said it would achieve recurring annual pretax cost savings of around 50 million pounds but on Wednesday increased that figure to 65 million and said they would be fully achieved in 2017, a year ahead of schedule.

The sports betting group added that the integration of the two companies was progressing ahead of plan with the majority of actions already completed.

Both brands still operate side by side in Europe and the group said on Wednesday it would adopt a more targeted approach to each, primarily aiming Betfair at "money-centric" customers while Paddy Power will concentrate on customers whose primary motivations are "social interaction and entertainment".

The combined group reported core earnings (EBITDA) of 181 million pounds, up 31 percent even as it increased marketing spending by 31 percent ahead of the European soccer Championships, a key event for the sector.

It said the second half of the year had started in line with its expectations and for the full year expects underlying EBITDA to grow by up to 30 percent to between 365 million and 385 million pounds.

"While our industry remains highly competitive, our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth," Chief (Taiwan OTC: 3345.TWO - news) Executive Breon Corcoran said in a statement.

($1 = 0.7596 pounds) (Reporting by Padraic Halpin; editing by Jason Neely)