Punter-friendly sports results hit revenues at Paddy Power owner Flutter‘s Irish and British business in the three months to the end of September, but online gaming boosted the division, figures show.
Betting giant Flutter lost $1.15 billion (€1 billion) in the three months to September 30th, including an $873 million charge for an online gambling ban in Brazil, the group said on Wednesday.
Revenues from betting on horse racing, football and other sports in the New York-listed giant’s UK and Ireland division slipped almost 7 per cent to $309 (€275 million) over the three months, from $330 million during the same period last year, Flutter said on Wednesday.
The Irish betting giant blamed an “adverse swing in sports results”, that is a higher-than-usual number of teams and horses backed by its customers winning, for part of the revenue slide.
But overall revenues at the division, which includes Paddy Power, Betfair and Sky Bet, increased 4 per cent to $889 million, boosted by strong growth in online casino games.
Last month Flutter confirmed it would cut 240 jobs at its Dublin head office from a total of 1,400 across the Irish and UK business to counter increased British betting tax.
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Globally, Flutter will pause a share buyback programme to prioritise investment, cutting debt and cost savings, its new chief executive, Dan Taylor, said on Wednesday, after the company reduced its profit forecast for a fifth successive quarter.
Flutter, the world’s largest online gaming company, has been forced to lower its profit expectations as higher regulatory costs, increased competition and strategy missteps slowed previously booming US growth.
Taylor, who took charge in October, said his four immediate priorities would be to build on the company’s US leadership position, capture opportunities in the nascent prediction market sector, increase value from its non-US portfolio and simplify the company’s operating model.
Flutter shares were 1.9 per cent lower in premarket trading in New York.
“Delivering against those priorities will require faster execution, tough decisions and disciplined investment,” Taylor said in a statement.
He told Reuters he was confident of deleveraging the company’s balance sheet over the next 12 to 18 months towards its target leverage range of two to 2.5 times earnings.
The company’s leverage ratio has risen to 4.6 times earnings from 2.2 18 months ago, before acquisitions in the US, Italy and Brazil.
Flutter, whose business includes US sports betting market leader FanDuel, also has a plan announced in August to save $500 million (€439.45 million) by 2029.
Just over two years ago, when Flutter promised up to $5 billion to shareholders, it had expected the US betting boom to more than double its core profit to $5 billion by 2027.
By the end of June, the buyback had returned $1.37 billion to shareholders.
Flutter is now forecasting a 7 per cent fall in full-year core profit to $2.5 billion from the $2.66 billion flagged in August and $2.59 billion expected by analysts. The latest cut was due to adverse sports results and a sports betting ban in Brazil.
Taylor said, however, that the underlying performance in the US was ahead of expectations. – Additional reporting: Reuters
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