Paddy Power owner Flutter's shares slide as it cuts full-year profit target 

Flutter Entertainment said revenues from its Paddy Power retail shops in Ireland fell 27% in the third quarter, but should recover strongly. 

Shares in Paddy Power owner Flutter Entertainment slid nearly 8% on the back of the betting group saying it now expects to post lower profits this year than initially anticipated.

Flutter managed to generate revenues of £1.44bn (€1.7bn) in the third quarter of the year, up 12% year-on-year, despite challenging trading conditions. 

However, its quarterly earnings took a hit from big sporting results going against it, and the same period last year featuring a busier sporting calendar due to the Covid logjam.

Flutter said unfavourable sports results in October took a £60m-sized bite out of its earnings.

It lost heavily on boxer Tyson Fury beating US rival Deontay Wilder, favourites winning in the Champions League and Liverpool’s recent 5-0 thrashing of Manchester United in the Premier League.

Online revenues, in the UK and Ireland, fell 5% in the third quarter, but Australia and the US surged, with rises of 20% and 85%. The group also recorded a 27% year-on-year slide in revenues in its Irish-based Paddy Power shops, although online sales impressed, due mainly to a slower reopening process than in the UK.

The company said its Irish outlet network is well-placed for the continuing recovery.

Flutter’s outlook has also been dimmed by a temporary suspension of its operations in the Netherlands, prompted by new regulation requiring operators to apply for a new online licence.

Flutter said its Dutch suspension will cost the group around £10m in earnings this year and about £40m in 2022. 

That depends on a recommencement of trading by the third quarter of next year and the Dutch business breaking even in the second half of 2022.

Overall, Flutter expects to generate adjusted earnings of £1.24bn to £1.28bn this year; down on its previous guidance range of £1.27bn to £1.37bn.

Flutter said it still expects its US revenues to come in at £1.3bn to £1.42bn this year, but losses there could be slightly higher than expected at between £250m and £275m.

It said it will likely make a decision on whether or not to go for a partial flotation of its FanDuel business there, sometime next year. By the end of next year, Flutter said it should be active in 20 states in the US, compared with 12 currently.