Flutter Reports Difficult First-Half Trading

By Todd Winkler,
Editor at online-gambling.com

Todd Winkler Editor at online-gambling.com

Todd Winkler is another one of our highly professional editors at online-gambling.com. The expert has been part of our team for 6 years, during which time he contributed articles regarding poker, blackjack, and DFS. Winkler is also knowledgeable about New Zealand's legal gambling market.

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Last updated: August 13, 2022

The FTSE100 betting group, Flutter Entertainment, has reported challenging first-half trading. Operating losses increased year-on-year to ￡112 million. Flutter stated in the publication of its 2022 H1 interim results that revenues and profits were affected by known macroeconomic and regulatory challenges. These challenges were highlighted by leadership at the beginning of the year.

The group continued to experience headline growth from period trading, with revenues amounting to ￡3.38 billion, up 11% from the corresponding 2021 H1 results of ￡3.05 billion. The group’s brands successfully implemented a “recreational player focus” across all markets. This helped it grow its active monthly player base to 8.7 million customers.

Revenue for Flutter’s home brand portfolio in Ireland and the UK fell 4% to ￡1.09 billion. The unit’s adjusted EBITDA decreased by ￡38 million compared to 2021 H1. The slowdown of the home market shows a tougher comparative period for the sports brands Sky Bet, Betfair, and Paddy Power. They saw a 15% revenue decline to ￡630 million, compared to peak results of ￡740 million in 2021.

Confidence Is High on Overcoming Home Challenges

Flutter is still confident that it can overcome challenges at home. The recently acquired asset of Tombola has registered 8% points of growth. The company applauded Sportsbet AU’s “outstanding performance” in Australia. Sportsbet AU continues to strengthen its “market leader podium position,” bringing in revenues of ￡612 million. It also made an EBITDA contribution of ￡219 million.

The international igaming unit of PokerStars by Flutter is still struggling; its revenues fell to ￡633 million (a 7% decline). PokerStars reported combined market exit costs in Russia/Ukraine (￡20 million) and in the Netherlands (￡20 million) during a difficult period. It also reported a change in the gaming tax in Germany (￡20 million). PokerStars adjusted EBITDA decreased to ￡122 million, a 32% decline in comparison to 2021 H1.

A Growing Belief That PokerStars Can Overcome European Challenges

Because of the unit’s strong revenue growth in consolidated markets like Brazil, India, Canada, Armenia, and Georgia, Flutter is still confident that PokerStars can overcome its challenges in Europe.

Flutter will refresh its international portfolio (non-UK/non-US) in H2 trading with the recently acquired Sisal SPA. The company believes it is well-positioned due to its leadership positions in its mature markets and the investment they are making in appealing, high-growth markets like India, Brazil, and Canada.

Flutter highlighted the market dominance of its FanDuel investment across North American markets. Its US market revenues increased to ￡1.1bn, a 50% increase in comparison to 2021 H1. This increase reflects FanDuel’s superior product. It also reflects FanDuel’s effective customer acquisition in operation across both established and recently regulated US states.

FanDuel took the top spot in 13 of 15 US states and claimed a 51% share of the market. This contributed to positive earnings in Q2. With the momentum of FanDuel in the US, Jackson believes they are on track to become profitable in 2023, thanks to their disciplined investment and strong customer economics. Despite performance headwinds, Flutter steps into H2 with confidence. The confidence stems from the fact that H1 EBITDA results of ￡476 million are in line with corporate expectations.