- Flutter expects profits before nasty problems in its non-US business to reach around £1.44bn
- Profits have taken a £50m hit due to ‘customer-friendly sporting results’
- Difficult conditions in the Australian racing market have also affected the company.
Flutter Entertainment Stock plunged after the gambling operator warned that annual profits outside the United States would be at the lower end of forecasts.
Shares in the owner of Paddy Power fell 8.8 per cent to £124.90 after the group said adjusted profits before unpleasantness for its non-US business were forecast to be around £1,440 million by 2023, having previously forecast up to £1.6 billion.
The FTSE 100 company revealed its profits had taken a £30m hit due to adverse currency movements and a £50m hit due to “customer-friendly sporting results” in September and October.
The result matches that of rival Entain, with the Ladbrokes owner last week reporting a £45m hit in punter-friendly football results in its third quarter.
Expectations: Flutter Entertainment, which owns Paddy Power, warned that its annual earnings outside the U.S. would be at the bottom of its previously guided range.
A further impact came from difficult conditions in the Australian horse racing market, which the group expects to continue next year.
As a result, Flutter’s revenue in Australia fell 7 percent at constant currency levels to £262 million for the three months ending in September.
But its total turnover still rose 13 per cent to £2.04bn following excellent trading in the US and UK.
Revenue in the former territory benefited from a record volume of new players betting on NFL games, and FanDuel expanded faster than any other brand in the gaming sector.
Meanwhile, Flutter’s business in the UK and Ireland, where it runs Betfair and Sky Betting & Gaming, was boosted by strong interest in the new Premier League season.
“Even in this seasonally quieter period, the power of our diversified business is clear,” said Peter Jackson, CEO of Flutter.
The Dublin-based company further announced plans to have a secondary listing on the New York Stock Exchange in the first quarter of 2024, after which it would be delisted by Ireland’s Euronext Dublin.
An increasing number of companies are seeking or considering listing on Wall Street in hopes of higher valuations and better access to liquidity.
Building materials supplier CRH Holdings, drugmaker Okyo Pharma and plumbing group Ferguson are among groups that recently moved their primary listing from London to New York.
And just last month, semiconductor company ARM Holdings staged the largest US initial public offering in two years, having rejected a London listing despite intense lobbying from the UK government.
Jackson said Flutter’s move to the United States “will provide the group with significant benefits by accessing the deepest and most liquid capital markets in the world.”
He added: “Overall, the significant US growth potential and ability to leverage benefits of scale across our diversified non-US portfolio supports our confidence in our significant and sustainable earnings growth potential.” long-term”.
Sports betting in the United States has gained considerable popularity since the U.S. Supreme Court declared unconstitutional a federal law that virtually banned the activity nationwide five years ago.
Russ Mold, chief investment officer at AJ Bell, commented: “The US has been the big opportunity for Flutter for some time, and continues to be, but today’s warning is a reminder that this is a bigger beast and if not all is working in their favor, the consequences can be dire for investors.’
