Flutter shares fall 4% despite a jump in revenue

Flutter chief executive Peter Jackson said Flutter is working towards adding a US listing for Flutter shares in Q4 or early next year. he said the listing would enable Flutter “to attract and retain talent and have a local equity that we can use for doing deals whether that’s with media or influencers”.

Wed, 09 Aug, 2023 - 09:01

Cáit Caden

Paddy Power owner Flutter shares tumbled around 4% despite reporting a jump in revenue during the first half of the year, driven by its FanDuel brand turning a profit in the US.

In a trading update, the betting giant posted core earnings of its net debt increased to £4.6bn, up 54% on the same period a year earlier, and revenue declined by 1% in Australia due to a changing tax environment.

However, the first six months were overall positive for the gambling firm as its US market leading brand FanDuel reached a “transformation point” and fuelled Flutter’s earnings growth.

Flutter posted group revenue of £4.8bn (€5.5bn), up 42% year-on-year and its recreational customer base increased to over 12m monthly players.

In the US, revenue grew 63% to $2.2bn (€2bn), driven almost completely by FanDuel and the acquisition of over two million new players.

Flutter chief executive Peter Jackson said “the ability to pay down our debts is significant” following the outperformance of FanDuel and that the a focus for the company will be on deleveraging its debt in the second half of the year.

Mr Jackson added that the company is “very comfortable with the speed it is deleveraging its debt”.

The growth in the US offset the losses coming from the sports betting platform FOX Bet, the company said. Flutter

Last month, Flutter and broadcaster Fox Corporation decided to close Fox Bet as it contributed less than 3% to Flutter’s revenue of $2.6bn in the US market last year.

Meanwhile, Mr Jackson said Flutter is working towards adding a US listing for Flutter shares in Q4 or early next year.

Mr Jackson told reporters the listing would enable Flutter “to attract and retain talent and have a local equity that we can use for doing deals whether that’s with media or influencers”.

He added that there are no plans to uproot Flutter’s headquarters from Ireland if the company gets the listing.

Elsewhere, in Ireland and the UK, online revenue rose by 14% to over €1bn. By the end of June, Flutter operated 607 retail outlets, down from 614 in the same month a year earlier, with 356 in the UK and 251 in Ireland. Flutter reached more than four million average monthly players across Ireland and the UK this year despite cost pressures on households.

Meanwhile, following clampdowns on unethical gambling practices, especially in the UK, the company invested £45m into safer gambling measures across the group in the first half of the year.

Mr Jackson said he “anticipates that we will continue to maintain some of the levels of investment into the second half”.

Flutter forecasts full-year adjusted US earnings of between £90 to £190m and overall group earnings in to reach between £1.44bn and £1.6bn in the second half of the year.

That would eclipse the record full year earnings of £1.4bn Flutter posted during the pandemic online betting boom of 2020.

“This profit profile provides us with a clear platform to invest materially in the second half, as we strive to continuously improve our customer offering,” said Mr Jackson.

Analysts at Jefferies said its full year guidance could be seen as conservative as it implied a 1% upgrade to consensus after a bigger beat in the first half.