26th Mar 2024 11:25
(Alliance News) - The US remains the "engine of growth" for Flutter Entertainment as it gears up for a possible primary listing move to New York.
The bookmaker, which already trades on the New York Stock Exchange, would lose its FTSE 100 status if shareholders back the primary listing move in a May poll.
On Tuesday, Flutter, the owner of Paddy Power and SkyBet talked up its US offering FanDuel, which it said achieved annual profit for the first time in 2023.
"Flutter delivered a strong 2023 performance as we continued to deliver on our strategy," Chief Executive Peter Jackson said. "As anticipated, our number one position in the US has transformed the group's earnings profile during 2023 as FanDuel delivered a positive US full year adjusted earnings before interest, tax, depreciation and amortisation for the first time."
In 2023, Flutter achieved revenue of USD11.79 billion, up 25% from USD9.46 billion in 2022. Its pretax loss, however, stretched to USD1.09 billion from USD295 million. Sales and marketing expenses rose by a quarter to USD3.78 billion. General and administrative expenses were up 36% at USD1.60 billion.
However, Flutter achieved adjusted Ebitda growth of 45% to USD1.87 billion from USD1.29 billion.
This was the first set of annual results Flutter has presented under US GAAP standards, as the bookmaker's pivot across the Atlantic continues.
Flutter said it has traded strongly so far in 2024, with revenue surging 23%. US revenue has jumped 56% so far, with sportsbook alone up 64%.
Richard Hunter, head of markets at interactive investor said the US remains the "engine of growth for Flutter, and is the area with which the group is increasingly being identified."
"Although the UK is presently the site of Flutter's primary listing, the shares began trading in New York in January, with the plan to switch the primary listing there later this year subject to shareholder approval. The move has already ignited investor interest in the US, giving the group access to deeper pools of liquidity," Hunter explained.
"In addition, the group’s brands are increasingly recognisable Stateside, exposing Flutter to a much broader audience (the addressable market was previously estimated to grow to more than USD40 billion by 2030) which provides scope for more players, increased revenues and ultimately profitability," Hunter continued.
He explained the US accounts for 38% of group revenues and is on "something of a tear."
"Revenues rose by 41% in the past year, with the region moving into positive adjusted earnings for the first time. The group retains its number one sportsbook position, with a net gaming revenue market share of 53.4% in the final quarter, while the FanDuel business saw a share of 26% in that period, also remaining the primary player. The group’s move into iGaming provides an additional revenue stream, where a strong pipeline looks likely to consolidate the gains seen so far," Hunter commented.
He said appetite for the stock remains "undiminished" despite its 24% rise over the last year, with the market consensus of the shares as a "strong buy" still resolutely in place.
Shares in Flutter Entertainment fell 0.3% to 17,230.00 pence in London on Tuesday morning.
By Jeremy Cutler, Alliance News reporter
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