- Full year profit at bottom end of guidance
- Strong growth in US, expected to be profitable in 2023
- Trading in line with expectations in first eight weeks
Gambling firm Flutter Entertainment (FLTR) delivered full year 2022 profit at the lower end of guidance despite generating strong sales growth of 22% helped by the acquisitions of Sisal and tombola.
Adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) increased 4% to £1.04 billion, but excluding acquisitions it fell 5%, impacted by regulatory headwinds and safer gambling initiatives which cost the firm £160 million.
Excluding the US, where Flutter is still making losses, EBITDA increased 4% to £1.29 billion, at the bottom of the £1.29 billion to £1.39 billion range.
Meanwhile US losses came in towards the middle of the guided range at £250 million compared with £243 of losses in 2021.
Revenues increased 67% to $3.2 million (£2.6 billion) with fantasy sports betting business FanDuel commanding a 50% share of gross gaming revenues in online sports betting.
Acquisitions increased group leverage with net debt increasing to $4.6 billion representing 3.9 times EBITDA, up from 2.6 times in 2021.
Flutter shares eased 5% to £128.85 in early trading after a strong run which has seen gains of 41% over the last year.
WHAT DID THE COMPANY SAY?
CEO Peter Jackson commented: ‘Growth in our recreational customer base delivered 2022 revenue growth of 27% and we ended the year with a record 12.1 million average monthly players in Q4.
‘2023 is off to a pleasing start driven by positive momentum from the end of last year.
‘With our combined US business on track to deliver a positive EBITDA for the full year 2023 for the first time, the group is currently at an earnings' transformation point and we look forward to delivering future growth and progressing further against Flutter's strategic priorities in the coming year.’
STRATEGIC GROWTH OPPORTUNITIES
The company said the US market is expected to be worth more than $40 billion by 2030, while markets outside the US are worth £263 billion and expected to grow at a compound annual rate of 9% a year over the next five years.
With only 30% of the combined markets currently traded online the size of the potential market opportunity for Flutter represents a ‘long runway’ for future growth, the company insisted.
‘As we look forward into 2023, the group is at an earnings transformation point, and very well placed to deliver future growth and progress further against our strategic priorities’, added Flutter.
After announcing a second share listing in the US, the company said early feedback from shareholders has been supportive.
