Paddy Power owner Flutter Entertainment PLC on Wednesday said its US arm reached an ‘inflection point’, helping the gambling firm swing to a first-half profit.
The Paddy Power owner expects earnings in line with market expectations, but warned of softer conditions in Australia. It also said it could in the US as early as the final three months of the year.
Flutter shares dropped 4.6% to 14,225.00 pence each in London on Wednesday morning.
Revenue in the first half of 2023 jumped 42% on-year to £4.81 billion, from £3.39 billion a year prior. Flutter reported a pretax profit of £83 million, swinging from a loss of £51 million.
Earnings before interest, tax, depreciation and amortisation soared 76% to £765 million from £434 million. Its adjusted Ebitda grew 73% to £823 million from £476 million.
In the US alone, it reported an adjusted Ebitda of £49 million, swinging from a loss of £132 million a year earlier.
Chief Executive Peter Jackson said: ‘The first half of 2023 marks a pivotal moment for the group, with our US business now at a profitability inflection point, helping transform the earnings profile of the group and significantly enhance our financial flexibility.
‘The US delivered another exceptional performance. We acquired over two million new players in the period, cemented our leadership position in sports and grew our share in iGaming to 23%. The US business was profitable in the first half with FanDuel generating over $100 million in Ebitda. 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. Our player acquisition strategy has consistently delivered, generating excellent returns on investment, embedding even greater value into our customer base, and increasing our future profitability.
Looking ahead, the company said its second half has started in line with expectations. Assuming ’normalised‘ sports results, it expects its full-year adjusted Ebitda to land in line with guidance.
Excluding the US, it expects an adjusted Ebitda between £1.44 billion and £1.6 billion, helped by ’strong momentum‘ in the UK, Ireland and some of its international markets. This will be ’offset by softer than expected market conditions in Australia‘.
In the US, it expects an adjusted Ebitda between £90 million and £190 million, with net revenue between £3.6 billion and £3.9 billion.
‘The second half of the year has started well and we look forward to adding a US listing for Flutter shares later this year or early next year,’ CEO Jackson said.
In February, Flutter said it was considering an additional US listing amid the growing success of its US-based sports betting company, FanDuel.
Besides being listed on the Main Market of the London Stock Exchange, where it is a FTSE 100 constituent, Flutter already is traded on the New York-based over-the-counter market.
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