Flutter shares rise 11% as Paddy Power owner raises expectations for strong US demand
- Flutter Entertainment owns gambling companies Paddy Power, Betfair and Pokerstars
- Group revenue rose 22% to $3.6 billion in the three months ended June
Flutter Entertainment shares shot up on Wednesday morning after the owner of Paddy Power raised its annual forecast.
At 10am on Wednesday morning they were up 10.6 per cent to £162.05, making them the biggest gainer on the FTSE 100 Index.
The Dublin-based company, which also owns Betfair and Pokerstars, said it had benefited from “positive” sporting results and an “excellent performance” in the last quarter.
Positive result: Flutter Entertainment shares surged on Wednesday morning after the owner of Paddy Power raised its annual forecast
Revenue rose 22 percent at constant exchange rates to $3.6 billion (£2.8 billion) in the three months to June 30, driven by huge growth in the US, where revenue rose 39 percent to $1.5 billion.
Outside the US, Flutter’s revenue grew by about $180 million to $2.1 billion, driven by the Indian Premier League and European Championship, which boosted gamblers.
The average number of monthly players on the company’s betting platforms increased by 17 percent year-on-year to 14.3 million.
Based on this performance, Flutter now expects annual US revenue to be between $6.05 billion and $6.35 billion, while adjusted earnings before adverse effects will be between $680 million and $800 million.
This contrasts with previous forecasts of $5.8 billion to $6.2 billion and $635 million to $785 million, respectively.
Excluding the US, Flutter expects revenue of $7.85 billion to $8.15 billion and adjusted earnings before negative items of $1.7 billion to $1.85 billion.
The company had previously expected revenue of $7.65 billion to $8.05 billion and adjusted profit before negative costs of $1.63 billion to $1.83 billion.
Flutter’s results are the first since the group moved its primary listing from the London Stock Exchange to Wall Street in late May and established its operational headquarters in New York.
The company was prompted to take this step in part because its FanDuel division generates the majority of its revenue and because companies in the U.S. market have access to much larger pools of capital.
Sports betting has become extremely popular in the US since the Supreme Court struck down a federal law in 2018 that banned sports betting outside a few states.
Several states have now relaxed gambling laws, presenting a huge opportunity for British and Irish bookmakers to grow their businesses.
Flutter CEO Peter Jackson said the company’s “excellent” second-quarter performance in the US was due to its “disciplined approach to customer acquisition and our industry-leading product, which offers our sports betting customers the best prices in the market.”
He added: ‘The returns we are seeing give us the confidence to continue to acquire customers in the second half of the year and build a larger business, which bodes well for 2025 and beyond.’
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