Flutter Entertainment Shares Tumble on Lower Earnings Guidance

By Dominic Chopping

Shares in Flutter Entertainment tumbled to the bottom of the Stoxx Europe 600 index after the gambling and betting group said earnings outside of the U.S. will be at the bottom of its guided range this year.

At 1015 GMT shares traded 9.9% lower at GBP12,350, their worst one-day performance in nearly two years.

The FTSE 100 company behind the FanDuel, PokerStars and Paddy Power brands said that excluding the U.S., its adjusted earnings before interest, tax, depreciation and amortization are expected at 1.44 billion pounds ($1.77 billion) this year, from previous guidance range of GBP1.44 billion to GBP1.6 billion. Favorable sporting results for gamblers and currency effects were flagged as weighing on earnings, in addition to weakness in the Australian racing market which is also expected to continue into 2024.

In the U.S., revenue and adjusted Ebitda are now both expected to come in at the mid-point of the previous range, with revenue seen at GBP3.75 billion and Ebitda at GBP140 million.

"At first glance, we expect to downgrade full-year 2023 ex-U.S. [Ebitda expectations] by 4% and U.S. by 18%, while for full-year 2024 we are likely to downgrade ex-U.S. by 9%," Goodbody analyst David Brohan said in a note.

Flutter reported an 8% rise in third-quarter revenue to GBP2.04 billion, boosted by a 22% jump in gaming revenue on the year while average monthly player numbers rose 16%. The U.S. and U.K. and Ireland saw double-digit increases in revenue in the quarter while Australia revenue dropped 18%.

"We remain positive on the Flutter investment case," Brohan added. "However, this quarter fell below expectations."

The company said it has finalized its plans to list in the U.S., saying it will list its shares on the New York Stock Exchange in the first quarter of 2024. It will also remain listed in London but will delist from Dublin.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

November 09, 2023 05:35 ET (10:35 GMT)

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