Flutter Entertainment’s Downward Revision of Full-Year Earnings

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Flutter Entertainment, the parent company of well-known betting brands Paddy Power and Betfair, recently announced a downward adjustment to its full-year earnings expectations. The company cited the impact of “customer-friendly sports,” including events such as the football World Cup, which significantly affected its profit margins.

Share Price Decline and Revised EBITDA Forecasts

Following the announcement, Flutter’s share price plummeted by 9.4% to £124, reaching its lowest point since mid-January. The company disclosed that its adjusted EBITDA for the entire group, excluding the US market, is expected to be around £1.44 billion (€1.65 billion), representing the lower end of the previously forecasted range announced in August.

Strategic Initiatives and Recent Acquisitions

Flutter emphasized its efforts to acquire well-performing betting and gambling companies in new markets, such as the recent purchase of Serbia’s MaxBet. The company also highlighted increased investments in customer acquisition and marketing campaigns, alongside the impact of foreign exchange rate fluctuations on its financial outlook.

Impact of Sporting Events and Market Conditions

The company faced challenges due to the outcomes of the FIFA World Cup and the Premier League, resulting in larger-than-expected payouts of approximately £40 million in December 2022. Flutter also acknowledged the sluggish performance of the Australian horse racing market, which persisted from the second quarter of 2023 to the third quarter, further contributing to the erosion of profit margins.

Anticipated Challenges and Strategic Changes

Flutter’s CEO, Peter Jackson, expressed concerns regarding the anticipated challenges in the Indian market due to the revised Indian Goods and Services Tax (GST), estimating an approximate £30 million decline in 2024 EBITDA for Flutter’s Indian multi-gaming platform, Junglee. Additionally, the company announced its decision to delist from Euronext Dublin, favoring the New York Stock Exchange early next year, aligning itself with the strategic moves of other prominent entities such as CRH and Smurfit Kappa.

SOURCE: Ref Image from Shares Magazine

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