Flutter shares tumble after World Cup wins knock profit
The gambling business behind Paddy Power and Betfair saw its shares tumble almost five per cent, after the company missed 2022 earning estimates due to customers winning bets during the Fifa World Cup.
Flutter Entertainment, which also owns Sky Betting and Gaming, was predicted earlier this year by Bloomberg analysts to gain EBITDA of £1.7bn – however in its financial results this morning the group reported EBITA of £1.05bn.
In December, whilst the World Cup was taking place Flutter made a £40m loss due to fans securing wins.
It comes after reports emerged in February that the FTSE 100 group was looking to expand its US market share as the group is gaining huge momentum in the region.
The London-listed group which operates as FanDuel in America revealed it had a “record” number of bets placed during the Super Bowl” and has acquired over 1.2m customers already in 2023.
In is full year results the group said that it is now in extensive talks with its shareholders to add an additional US listing of Flutter’s ordinary shares to “reap capital market benefits”.
Reports in the Financial Times said the decision would require a 75 per cent approval rate from shareholders and see the group either listed on the NYSE or Nasdaq.
“Besides the US, the full re-opening of the high street betting shop estate in the UK and Ireland, the FIFA World Cup and acquisitions were positive factors but three issues did weigh on profits above and beyond sporting results,” Russ Mould , AJ Bell Investment Director, told City PM
Mould said that ultimately these factors are “just part of the business of bookmaking”.
“The skill here is in the oddsmakers building a book and betting overround that can protect them, to a degree, from the jollies – the favourities – going in,” he said.
Commenting on the results, Peter Jackson, chief of Flutter Entertainment, said: “Flutter delivered a strong performance in 2022, continuing to execute on the strategic priorities we outlined last March.
“Growth in our recreational customer base delivered 2022 revenue growth of 27 per cent and we ended the year with a record 12.1m average monthly players in Q4.