Shares in Flutter Entertainment fell sharply on Thursday morning despite the parent company of Sky Bet and Paddy Power unveiling a “strong” performance in a third quarter trading update.
Issues including customer-friendly sports results meant that the group’s earnings for 2023 outside the US are set to be at the lower end of previous guidance.
Flutter also announced plans to delist from the Dublin stock market when it adds a listing in New York in the first quarter of next year.
The company said group revenue for the third quarter had increased by 13 per cent to more than £2 billion in the period, with growth in gaming revenue helping to offset a 12 percentage point impact caused by sports results.
Weakness in the horseracing market also meant that Flutter’s Australian arm Sportsbet recorded a seven per cent fall in revenues, a situation expected to continue into 2024.
Flutter said its US arm FanDuel had the number one position in sports betting with a 40 per cent market share.
US revenue for 2023 is now being forecast to hit £3.75bn, compared to previous guidance of £3.6bn to £3.9bn, with earnings set to be £140 million compared to £90m to £190m.
However, outside the US, earnings are now forecast to be at the bottom of the previous guidance of £1.44bn to £1.6bn, following a £50m hit from sports results in September and October and £30m from adverse movements in foreign exchange rates.
Flutter chief executive Peter Jackson said: “The group had another strong quarter in the third quarter and even in this seasonally quieter period the power of our diversified business is clear with revenue growth of 13 per cent to over £2bn.
“We remain the number one choice for sports betting and gaming customers globally, and our 16 per cent growth in average monthly players augurs well for our continued growth and market leadership.”
He added: “We are making good progress towards our US listing which will bring the group significant benefits from accessing the world’s deepest and most liquid capital markets. Overall, the significant potential for US growth and ability to leverage scale benefits across our diversified portfolio outside of the US, underpins our confidence in our significant and sustainable long-term earnings growth potential.”
However, David Brohan, gaming and leisure analyst at stockbrokers Goodbody, described Flutter’s announcement as a “disappointing update”.
Flutter’s share price was down more than nine per cent on Thursday morning at 12,450p.
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