Flutter Entertainment posts 25% surge in sales as bet on FanDuel pays off

By Louis Goss

Gambling giant Flutter Entertainment on Tuesday posted a 25% surge in its revenue - driven by the fast-paced growth of its U.S. subsidiary FanDuel - while also reporting a widening of its overall losses after a series of multi-million-dollar impairment charges hit its bottom line.

In its first set of results since moving its secondary listing to New York, the Dublin headquartered company posted a 25% increase in its 2023 full-year revenue, to $11.79 billion, as its sales were bolstered by a 40.6% increase in revenues from its U.S. division, to $4.48 billion.

Flutter Entertainment's bottom line was, however, hit by a series of major impairments, including a $725 million charge relating to a trademark dispute over its PokerStars brand, which saw the FTSE-100 company post net losses of $1.21 billion.

Flutter's NYSE share price (FLUT) (UK:FLTR) was up 3% in pre-market Tuesday, having increased 21% year-to-date.

The Irish company, which owns gambling brands including BetFair and PaddyPower, attributed its revenue growth to a strong performance from American sports betting company FanDuel, driven in part by record rates of betting on the U.S. Super Bowl.

Flutter Entertainment first bought into FanDuel by acquiring a 58% stake in the New York company for $158 million in 2018, in a bid to capture a share of the U.S. market after the Supreme Court overturned the country's decade's old gambling laws.

The surge in Flutter Entertainment's revenue signals its bet on FanDuel has paid off after the Irish company later upped its holding in the New York headquartered betting firm to 95%, by acquiring another 37% stake at a significantly higher price of $4.2 billion in 2020.

In a statement, company CEO Peter Jackson reiterated the company's plans to shift Flutter Entertainment's primary listing from London to New York, with a view to holding a shareholder vote on 1 May 2024 to approve the switch.

Richard Hunter, head of market at Interactive Investor, said Flutter Entertainment's move towards a U.S. listing could now act as a catalyst for growth, in giving the company greater access to capital and exposing it to a wider American audience.

Shore Capital analysts, led by Greg Johnson, however, argued that the question now is "what level of New York listing premium is already reflected in the price."

Outside the U.S., a 14.4% uptick in sales from Flutter's U.K. and Ireland divisions, to $3.04 billion, offset a 7.1% drop in revenue from its Australian business, to $1.45 billion, caused by softness in the country's horse racing market.

Looking ahead, Flutter Entertainment said it now expects its U.S. revenue to grow by another 36% in 2024, to around $6 billion, and see its sales outside the U.S. grow by 6.3% to $7.85 billion.

-Louis Goss

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03-26-24 0630ET

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