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UK – Flutter profits fall 70 per cent

By - 27 August 2020

Flutter Entertainment has published interim results showing that H1 profit has fallen 70 per cent year-on-year to £24m and a revenue rise of 49 per cent to £1.5bn. Adjusted Ebitda increased from £216m to £342m.

Revenue at Paddy Power Betfair fell 18 per cent to £540m. Online fell eight per cent, retail 50 per cent and total stakes were 38 per cent lower at £2.2bn. Sky Betting and Gaming revenue is up 32 per cent, from £331m to £439m, and adjusted operating profit 73 per cent higher at £172m. Revenue at PokerStars rose 40 per cent to £697m and operating profit is up 70 per cent at £357m.

Peter Jackson, Chief Executive at Flutter Entertainment, commented: “The first half of 2020 has been defined by the outbreak of the global Covid-19 pandemic. For Flutter, my primary concern has been to keep our colleagues and customers safe. I am proud of the support we have been able to provide to our employees during this challenging time and the additional safer gambling measures we have put in place to enhance player protection.

“The pandemic has been a highly unusual backdrop for completion of our combination with The Stars Group and I would like to take this opportunity to thank all of my colleagues across the enlarged Group for their hard work, commitment and resilience as we have combined to form one team.”

Flutter cited the combination with The Stars Group for delivering enhanced diversification as evident in its H1 performance and a new organisational structure being in place. It has reported that the Australian integration is well advanced with global technology decisions progressing.

Jackson said: “The Group’s first half financial performance exceeded expectations as we benefitted from geographic and product diversification. In the period prior to Covid-19 related disruption, our businesses performed well with strong customer growth and favourable sports results. In the period thereafter, the cancellation of sports and closure of our shops led to reduced sports revenues in the UK and Ireland.

“However, this was more than offset by an increase in the number of recreational customers playing our poker and gaming products globally, as people sought new forms of home entertainment. In Australia and the US, the continuation of horse racing meant that overall sports revenues grew in both regions.

“While maintaining strong trading momentum, we have also made good progress since May on the integration with TSG. All four regional CEOs have been appointed and most key leadership roles have now been filled. Important decisions are progressing on our technology plans and we are aligning our regulatory and responsible gambling approach across the expanded Group.

“In Australia, integration is particularly well advanced and we will migrate BetEasy customers over to Sportsbet imminently. We plan to provide a more detailed strategic update, as well as a synergy update, at the time of our full year results in March 2021.

Flutter has forecast full-year adjusted Ebitda of £1.1bn-£1.3bn excluding the US and an Ebitda loss of £140m-£160m in the US.

Jackson added: “The second half has started well, with good sports betting performance following the return of major sport events, whilst gaming performance has remained resilient. Looking ahead, we have identified promising opportunities to increase investment across the Group and, while the outlook with respect to Covid-19 remains highly uncertain, the diversification of our Group means we approach the future with confidence.”

Furthermore, Flutter has also confirmed that former The Stars Group CEO Rafi Ashkenazi has stepped down as a non-executive director with immediate effect. Chairman Gary McGann said: “Rafi has made a significant impact on TSG during his seven-year tenure and was instrumental in transforming TSG from a single product operator to a diverse global leader with multiple product offerings. We wish him well for the future.”

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