Flutter Entertainment PLC on Friday reported a swing to a first-half loss, though revenue climbed, and the gambling firm said it is yet to see ‘discernible signs’ of a hit due to falling consumer confidence.
The Paddy Power and Sky Bet owner added it was profitable in the US in the second quarter, as its FanDuel business scoops up more market share.
Flutter shares were 5.8% higher at 9,926.00 pence each in early trade in London on Friday.
In the six months to the end of June, Flutter’s revenue increased 11% to £3.39 billion from £3.05 billion a year earlier. However, it swung to a pretax loss of £51 million from a £77 million profit.
Flutter reported amortisation costs increased 3.6% year-on-year to £286 million. Operating costs were 17% higher at £1.60 billion.
Earnings before interest, tax, depreciation and amortisation were 23% lower year-on-year at £434 million from £562 million.
During the half, it said it increased its average monthly players base to players to 8.7 million, 14% higher than the prior year. Flutter said the rapid expansion of its US business FanDuel was key to this growth, along with good underlying player momentum in the UK & Ireland, as well as Australia.
In the US, its online sports betting market share accelerated to 51% in the second quarter, helped by FanDuel’s ‘efficient’ customer acquisition and strong operational execution. FanDuel provides sportsbook and fantasy sports services.
Sports betting is being legalised in many US states for the first time following a Supreme Court ruling in 2018, allowing UK bookmakers - experienced in sports betting - to tap into the lucrative market there.
Looking ahead, Flutter expects a full-year Ebitda outcome in line with market expectations. Its adjusted Ebitda, excluding the US, is expected to land between £1.29 billion and £1.39 billion.
In the US, it expects net revenue between $2.85 billion and $3.1 billion, topping expectations.
In the second quarter alone, its US unit was Ebitda positive. It is on track for full-year profit in the US in 2023.
‘The first half of 2022 was positive for the group with significant progress made against the strategic objectives we outlined in March. We expanded our recreational customer base by over one million players in the half and increased the proportion of customers using safer gambling tools to over one third,’ Chief Executive Peter Jackson said.
‘We are particularly pleased with momentum in the US where we extended our leadership in online sports betting with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2. We remain firmly on the path to profitability in 2023, driven by our compelling customer economics and disciplined investment.’
Flutter said it has kicked off the second half ‘well’, with the European football season restarting.
In addition, it noted it has seen little evidence of consumer confidence woes hitting punter numbers.
‘We currently see no discernible signs of a consumer slow down and resultant reduced spending levels across our businesses. However, we will continue to closely monitor key spend indicators as we move through the second half given the uncertain macroeconomic outlook,’ Flutter added.
On Thursday, fellow bookmaker Entain posted revenue of £2.09 billion for the six months ended June 30, up 19% year-on-year from £1.77 billion. The Ladbrokes and Coral owner’s pretax profit, however, tumbled by 70% to £39.5 million from £130.6 million.
888 Holdings PLC on Friday, meanwhile, said half-year revenue fell 13% to £332.1 million from £380.9 million. Pretax profit slumped by two-thirds to £14.4 million from£41.9 million.
Copyright 2022 Alliance News Limited. All Rights Reserved.
