Yahoo Finance Return of sports boosts Paddy Power-owner Flutter
Flutter Entertainment (FLTR.L), the owner of Paddy Power and other gambling brands like Betfair, saw sales soar over the last six months thanks to the return of regular organised sports around the world and a successful merger with rival The Stars Group.
Revenue rose 99% to £3bn ($4.155bn) in the six months to 30 June, Flutter said on Tuesday. Pre-tax profit soared 221% to £77m.
Flutter said the business was boosted by the return of a more normal sporting calendar, with major tournaments like Euro 2020 going ahead. Sports betting revenue soared by 57% in the first half to £1.8bn. Gaming revenue on products like online slots and poker stood still.
"Our global sports businesses benefitted from further enhancements to our products and the return to more normalised sporting calendars while we sustained our strong performance in gaming despite the challenging comparatives set last year," chief executive Peter Jackson said in a statement.
Jackson said the first half of 2021 "exceeded our expectations." Greg Johnson, an analyst at Shore Capital, said Flutter's results were "very encouraging" with earnings "nicely above our expectations."
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The accounts were flattered by Flutter's successful merger with The Stars Group, which completed in May. The Stars Group owns online casino and gaming brands, such as Sky Betting and PokerStars.
When the impact of that deal was stripped out, Flutter's sales rose by more than 30% but earnings fell 12% as the cost of expanding its US business weighed on the company. Flutter owns the FanDuel fantasy gaming app in the US and is rolling it out to new states as sports betting rules are relaxed. The company said it takes 12 months for newly signed up FanDuel customers to become profitable.
"We remain absolutely focused on extending our sports product advantages and replicating our market share success in further states as they regulate," Jackson said.
"In gaming we see an opportunity to grow our market share and look forward to further enhancing our product offering in the coming months."
Jackson said the second half of 2021 had "started well." Flutter told investors to expect earnings of £1.2bn to £1.3bn outside of the US and a loss of between £225m to £275m at its US business. The company cautioned that the forecasts were dependant on "an uninterrupted sporting calendar for the remainder of the year and normalised sports results."
Flutter held off from declaring an interim dividend but said it would resume payouts to shareholders once debt levels are reduced.
Shares in the company rose 5% in London.
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