Flutter swings first US profit before New York listing

The gambling group that owns Sky Bet and Paddy Power made its first US profit in the first half, as it amassed millions of customers ahead of an IPO in New York.

Flutter Entertainment posted a better-than-expected US profit of £49million, compared to a loss last year of £132million. Peter Jackson, chief executive of the FTSE 100, called the performance in the first half “exceptional”.

He claimed that FanDuel was its US business and it had achieved profitability six months sooner than expected. The company also had the distinction of being the first US betting group to achieve a profit.

Paul Ruddy is an analyst with the stockbroker Davy. He said that in a sector like this, where scale matters, the US company generated more than 35 percent more revenue than number two and almost double the third.

Flutter’s boss, who is not “particularly concerned” by the decline of FanDuel’s market share (from 50 percent in the first quarter down to 47 percent in the second), said that he wasn’t bothered at all. The capital markets are “always in flux” and FanDuel is still far ahead of DraftKings.

The first step is to obtain an additional New York listing, while maintaining its primary listing in London. Jackson stated: “We have been clear that, should our shareholders support it, this move will open the doors to us moving to the States for our primary listing.” It allows US citizens to purchase our stock with greater ease, since it will be listed on the US stock exchange.

The company reported gains in market share for the UK and Ireland. However, its huge Australian betting business suffered a setback as punters who increased their online gambling to combat the pandemic returned to their old betting habits. This was a global phenomenon, but it was particularly noticeable in Australia.

Analysts have questioned the reason why Flutter’s acquisition spree has slowed down while Entain – one of its closest competitors – continues to make bolt-on acquisitions. Jackson, however, insists that Flutter is still actively interested in mergers and acquisitions.

When asked which regions Flutter was looking for acquisition opportunities in, he replied: “If we look at the whole world and the regulated market, we are only in 20 percent of the markets where we would like to achieve podium positions, so there’s a lot of places that we can pursue.”

Flutter reported that it increased revenue in the UK and Ireland by 13 percent during the six-month period ending June. The company’s overall revenue was £4.8 billion (up 42%) on last year. It went from a loss of £112 millions in 2017 to a profit of £128 million for the first half of 2023.

The company announced a new US guidance range of £90 to £190, which is slightly higher than the consensus estimate of £133 at mid-point. The group’s earnings, excluding US, are expected to be between £1.44 billion and £1.6billion this year.

Flutter shares dropped 435p or 3 percent to £144.60.

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