Paddy Power Betfair extends losses on sluggish European growth

* Shares (Berlin: DI6.BE - news) extend losses as online growth a concern for some

* Incoming CEO to take up role in next six to 12 months

* Departing chief says long-term strategic position sound (Adds details, share price, analyst quotes)

By Padraic Halpin

DUBLIN, Aug 8 (Reuters) - Shares in Paddy Power Betfair (Other OTC: PDYPF - news) extended losses on Tuesday due to disappointing growth in the gambling firm's main European online market, a day after news of its chief executive's planned departure hit the stock hard.

The bookmaker gave some details of its financial results for the first half of 2017 a day early on Monday when it announced that Breon Corcoran would be replaced by Peter Jackson, CEO of the British arm of global payments business WorldPay Group (Other OTC: WDDYF - news) .

While underlying core earnings grew 21 percent year-on-year, a detailed breakdown on Tuesday showed growth of just 6 percent in its online division that accounts for two-thirds of earnings and is dominated by the fiercely competitive British market.

"The trends in the European online division remain our biggest concern," Davy Stockbrokers analyst David Jennings wrote in a note, highlighting a dip in online net revenue margin to 6.2 percent from 6.7 percent a year ago.

Shares in the group, which suffered their worst day in five months by tumbling 4.7 percent on Monday, were 4.4 percent lower at 72.15 pounds in London trading by 1100 GMT.

Paddy Power Betfair said the fall in net revenue margin was driven by less favourable sports results but also by increased investment in pricing and promotions as "intense competition" in Britain showed little sign of letting up.

Competition has intensified as firms seek to offset higher taxes and tighter regulation with increased revenues, leading to a flurry of mergers including last year's 6 billion pound ($7.82 billion) tie-up between online betting exchange Betfair and Paddy Power (EUREX: 27913021.EX - news) , which operates shops as well as an online business.

Its market share by revenue in Britain and Ireland (Other OTC: IRLD - news) was flat to slightly down as a result, Corcoran said, reiterating that some competitors were losing money at an unsustainable rate in a bid to win customers and that he was very comfortable with Paddy Power Betfair's long-term strategic position.

"I'd like the UK business to be in a slightly better place today but in six months or 12 months time when I leave, hopefully we'll have addressed that," Corcoran told Reuters in a telephone interview.

Goodbody Stockbrokers said the group, which is due to start rolling out new products next year once its platforms are fully integrated, had the cost efficiency, brand and marketing strength to drive gains over the longer term.

"The exit of influential CEO Breon Corcoran has understandably raised concerns, but the CEO designate looks like a candidate that ticks all the right boxes to take advantage of the arsenal this group will possess in 2018," Goodbody analyst Gavin Kelleher wrote in note.

"Patience is required in the short term but the long term investment case remains intact." ($1 = 0.7676 pounds) (Reporting by Padraic Halpin; Editing by Susan Fenton and Adrian Croft)