Flutter Entertainment, a global gambling and sports wagering firm, recently announced that it expects to reach the lower end of its previously predicted full-year income range, with the exception of the newest US market. However, this announcement caused the firm’s shares to plummet on November 9.
The main reason cited for the poor profit results was the weakness in the Australian horse racing market, where third-quarter revenues fell by 7% year-on-year on a constant currency basis. Despite this, Flutter reported an increase in income by 8% and 13% in continual currency terms. Stake increases of 21% prior to the trading update fell to 11% during early trading.
One challenge the firm faced was the players’ steady winnings during September and October, which resulted in a payout of 50 million pounds, along with adverse foreign exchange rate movements adding a further £30 million.
On the positive side, Flutter Entertainment managed to become the first online wagering operator to generate income in the U.S. during the first half of 2023. It expects full-year U.S. earnings of 140 million pounds versus its previous estimate of 90 million to 190 million pounds.
Despite these achievements, analysts polled by Refinitiv and David Brohan, an analyst of Goodbody, expressed disappointment with the firm’s update. This disappointment was also reflected in the news that Flutter’s rival, 888 Holdings, had cut its yearly income projections following a 10% drop in Q3 income, and Entain, the owner of Ladbrokes, had issued a third-quarter and yearly online net gaming income warning.
In terms of financial performance, the gaming income of Flutter far outpaced sports wagering in the quarter. Total income at its biggest subsidiary, FanDuel, increased by 20% on a constant currency basis. Additionally, profits increased by 19% at its global subsidiary managed by Sisal, the Italian regulated market leader. Income in Ireland and the UK also saw an 11% increase, with Flutter stating that it “continues to take market share.”
In a further strategic move, the firm revealed its intention to delist from Euronext Dublin as it plans to add a New York listing sometime in early 2024. This move is seen as representing a blow to the Irish stock market, coming after other high-profile exits in the industry.
Overall, while Flutter Entertainment has faced some significant challenges, it also continues to make strides in various areas of its business, particularly in the US market.