'Very favourable' Euros helps Flutter raise profit forecast alongside strong US growth
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The markets have reacted favourably after Flutter Entertainment raised its profits forecast for the year as the European Football Championships and strong growth in the US helped it outperform expectations.
The news came as the parent company of Sky Bet and Paddy Power published its financial results for the second quarter of the year on Tuesday night, its first such announcement since the gambling industry giant moved its primary listing to the New York Stock Exchange.
Flutter has kept a secondary listing on the London Stock Exchange where its share price was up nearly 11 per cent at 16,260p on Wednesday afternoon.
It was also confirmed on Wednesday that the company is in talks to buy Italian operator Snaitech, while there has been speculation linking Flutter to a deal in Brazil.
Flutter's group revenue rose 20 per cent during the quarter to $3.6 billion (approx £2.8bn/€3.3bn), while adjusted core earnings were up 17 per cent to $738 million. Average monthly players also rose by 17 per cent to more than 14 million.
Flutter said its American arm FanDuel had extended its market leading position, with a total online gross gaming revenue market share of 38 per cent, while revenue was up 39 per cent to $1.5bn.
The company said performance in the UK and Ireland had been driven by "continued momentum in iGaming, a positive European Football Championship, and favourable sports results".
In Australia, however, Flutter said the horseracing betting market remained in year-over-year decline.
Flutter now forecast US revenue for the year of $6.05bn to $6.35bn and adjusted ebitda (earnings before interest, taxation, depreciation and amortisation) of $680m to $800m, up three and four per cent respectively on the previous midpoint guidance.
Outside the US, Flutter forecast revenue of $7.85bn to $8.15bn and adjusted ebitda of $1.69bn to $1.85bn, both an improvement of two per cent on the previous midpoints.
Flutter chief executive Peter Jackson hailed "another strong quarter", a period during which the company moved its operational headquarters to New York along with its primary listing reflecting "the importance of the US market to Flutter and our view that the US is the natural home for our business".
Of Flutter's American arm, he said: "Our US performance was excellent in new and existing states reflecting our disciplined approach to customer acquisition and our best-in-class product, which offers our sportsbook customers the best pricing in the market."
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Jackson added: "The returns we are seeing give us the confidence to continue driving customer acquisition in the second half, building a bigger business, which bodes well for 2025 and beyond."
In other markets, Flutter said engagement with the Euros and the Indian Premier League cricket helped drive average monthly players 15 per cent higher.
Jackson added: "Outside of the US, we delivered an engaging offering during the European Football Championships, as over four million customers placed a bet on the tournament, with results during the tournament very favourable for us."
David Brohan, gaming and leisure analyst for stockbrokers Goodbody, described it as an "excellent update" from the company, adding: "Flutter continues to be the best in class operator."
Following a report by Sky News on Wednesday that it was in talks with Playtech to buy its Italian arm Snaitech in a £2bn deal, Flutter confirmed it was in discussions, but added: "At this stage there is no certainty that Flutter will proceed with an acquisition."
Playtech said it had given Flutter a period of exclusivity to complete due diligence and finalise documentation.
Snaitech is one of the largest gambling operators in Italy and owns San Siro racecourse.
Flutter has also been linked with a £1bn deal to buy Betnacional, a gambling operator in the much-coveted Brazilian market.
Jackson did not comment specifically on those reports but told analysts he felt Flutter was "reasonably placed" in Brazil thanks to its Betfair and PokerStars brands, adding the company was "ambitious".
He added: "We will work out what we want to do in Brazil and when we've made a decision we'll let the market know if there's something to say."
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