Flutter H1
The top line
Revenue up 99% to £3.05bn ($4.22bn), pro forma up 30% while adjusted group EBITDA was up 75% to £597m. Excluding US losses that figure would have been up 101%. Pre-tax profit up 2221% to £77m.
US revenue rose 159% to £652m ($906m) and the company expects US to be EBITDA positive in 2023.
Outlook for group ex-US for H2 to be between £1.27-1.37bn and US to be between £1.285-1.425bn ($1.8-2bn)
Look at me now ma: Flutter is understandably proud of its no.1 status in the US where the company said it hit 45% of sports-betting market share in Q2. Peter Jackson CEO said they were happy with the scaling of the US business and noted the gap between FanDuel and the competition had widened during the period. He added that the US division was now the second largest division of the group.
“Look at the benefits from same-game parlay, that’s a really good example,” Jackson said. “It’s one thing to buy these things externally and quite another to develop it in-house and have it as an integral part of the customer offer.”
Jackson was keen to stress that the business was benefiting from a focus on the product and that it “wasn’t complacent” about the competitive nature of the market. He was also keen to point out that while the company believes there are opportunities in online gaming, of the nine states likely to open by the end of 2022, only one would feature igaming. He also noted that it was “worth remembering we run the world’s largest online casino business.”
“The plan we have for the US is to make sure we bring a lot of that expertise into the US market,” he added. “We’re also getting much better at improving the cross-sell journey in the US. Having the largest user base of sports bettors gives us tremendous cross-sell ability.”
Between friends: Asked specifically about recent M&A and whether yesterday’s $1.56bn deal between DraftKings and GNOG had any impact on Flutter’s market access deal with Golden Nugget, Jackson said not:
“It’s an expensive way for them to see our market share data.”
As for being involved in more M&A itself with regards the US, Jackson said “at this moment we think we have everything we need.” “The size and scale of the Fanduel organization is at a completely different level to our competitors.” As for the rumored FanDuel IPO, Jackson emphasized it would only ever be a small slice that was floated in the US and that FanDuel would remain very much a subsidiary of Flutter.
Profit share: Looking at the prospect of the US being EBITDA positive by 2023, Jackson said this figure was only an output and “reflects simple mathematics.” “Our sheer scale and positive contribution will more than offset the cost of acquiring more customers,” he added before noting that if any of California, Texas or Florida legislated favorably it would change this situation once again. “But that would be a noise problem to have,” Jackson noted.
Share and share about: Back on home territory, the company said its three UK-facing brands – Paddy Power, Sky Bet and Betfair – were benefiting from “shared learnings.” Jackson suggested the company was :”well-placed’ for whatever comes out of the UK Gambling Act review regarding affordability limits. Noting that in the UK and Ireland online earnings grew by 50%, Jackson said here has been an “obvious shift from retail to online.” However, “it’s hard to say how much of a permanent shift,” has taken place. He added that the company had “definitely” taken market share.
Kissed a girl: The Sportsbet business in Australia has continued with what Jackson called its “phenomenal” performance with the events in the last 18 months leading to a “permanent step change” in the size of the business. “A lot of people trialed and sampled our product and really liked it,” Jackson added. “That’s what is leading to the permanent step change.”
Check out these additional articles on Earnings + More:
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- DraftKings analyst reaction
- Bally Corp analyst reaction
- Scientific Games analyst reaction
- GAN analyst reaction
