Yahoo Finance Flutter slashes earnings outlook after customer-friendly sports results
Paddy Power and Betfair owner Flutter Entertainment has cut its full-year earnings outlook after a recent run of customer-friendly sports results.
The group said it was left nursing a hit of around £60 million due to unfavourable results in the first 24 days of October, while it is also expecting a £10 million knock to earnings in the fourth quarter due to a temporary exit from the Netherlands following a change in regulations.
The blow is set to see full-year underlying earnings come in at £1.24 billion to £1.28 billion for the group, excluding the US, against the £1.27 billion to £1.37 billion range it forecast in August.
Shares in Flutter tumbled more than 8% in morning trading.
The group also revealed that customer-friendly results took its toll on the US business, with a £15 million impact last month, as it increased 2021 loss expectations for the division to between £250 million and £275 million.
It had previously guided for a loss of between £225 million and £275 million at the arm, which includes FanDuel.
Flutter is aiming to spin off its US business led by FanDuel, but the plans have been delayed by the departure of previous FanDuel boss Matt King who has since been replaced by Amy Howe.
The group said that despite the recent earnings impacts, it grew the number of average monthly players by 13% year-on-year to 7.3 billion in the third quarter and saw revenues rise 9% – or 12% at constant currencies – to £1.4 billion in the three months to September 30.
Chief executive Peter Jackson said: “While a run of customer-friendly results in October have resulted in win margins being below expected levels in the quarter to date, the underlying strength of our business is clear; we have grown our online recreational player base by 46% in just two years.
“With more international jurisdictions and US states on the path to regulation, we look forward to sustainably growing our global player base further in 2022.”
The group said revenues at its UK business fell 5% to £491 million in the third quarter as it came up against tough comparisons from a year earlier, when sports events took place after being delayed due to the lockdown.
Flutter added that Britons were also gambling less as they had more entertainment options thanks to this summer’s easing of lockdown restrictions.
Its betting shops – which were fully open in the third quarter – saw revenues drop 6%, but were 9% higher in the UK than in the same period in 2019 and 27% lower in Ireland where restrictions were eased more slowly.
