Online betting group Flutter sees US profit in 2023, shares spike (updated)
10/08/2021 09:11
* Flutter predicts profit in the U.S. for first time
* Three-fold increase in U.S. customers in past 12 months
* 2021 EBITDA seen at 1.27-1.37 bln pounds vs 1.4 bln
* Permanent step change in scale seen in Australian unit
(Adds details, CEO quotes)
By Padraic Halpin
DUBLIN, Aug 10 (Reuters) - Paddy Power, Betfair and Poker
Stars owner Flutter Entertainment FLTRF.I expects to turn a
profit in the United States in 2023 after further heavy
investment in the fast-growing market contributed to a 12% fall
in first half earnings across the group.
It was the first time the world's largest online betting
group predicted when its U.S. business would generate profits
since a ban was lifted on sports betting there in 2018 and
gambling took off.
Shares in Flutter were 6.9% higher at 163.1 euros by 0745
GMT.
Flutter said it had cemented its leadership position in the
U.S. online market thanks to a three-fold increase in customers
over the last 12 months. It expects to almost double the number
of states it operates in to 19 over the next 18 months,
including New York.
"We think the next 18 months are going to remain very big
for customer acquisitions," Flutter Chief Executive Peter
Jackson told analysts.
Revenue at its U.S. FanDuel unit surged 159% to 652 million
pounds ($902.89 million), making it the second largest division
across the group where revenue grew by 30%. It was the smallest
division by sales a year ago.
Group earnings before interest, tax, depreciation and
amortisation (EBITDA) fell to 597 million pounds on a pro-forma
basis. Excluding an operating loss in the United States,
earnings were 2% lower year-on-year.
Jackson said a 52% year-on-year increase in its Australian
player base also suggested that its market leading Sportsbet
unit may have experienced a permanent step change in scale.
The Dublin-based group said it expected full-year adjusted
EBITDA of between 1.27 billion pounds and 1.37 billion pounds,
including a U.S. loss of between 225 million and 275 million
pounds, down from 1.4 billion pounds in 2020.
Jackson added that Flutter expected to appoint a new chief
executive at FanDuel "fairly soon" - a prerequisite, he said,
for a potential partial listing of the business which remains
under consideration. urn:newsml:reuters.com:*:nL1N2LB0A9
($1 = 0.7221 pounds)
(Reporting by Padraic HalpinEditing by Louise Heavens and
Tomasz Janowski)
((padraic.halpin@thomsonreuters.com; +353 1 500 1504; Reuters
Messaging: padraic.halpin.thomsonreuters.com@reuters.net))