Flutter’s shares rise on US bump, robust outlook
Shares in online betting giant Flutter jumped 12% on Thursday after analysts said fourth-quarter market share gains and stronger-than-expected win margins in the fast-growing US market augured well for 2024.
While the world’s largest online betting company did not provide full-year guidance in its trading statement, the response from the market was in sharp contrast to rival 888 Holdings, whose shares slumped on Wednesday on a weaker-thanexpected 2024 outlook.
Flutter, home to the Paddy Power, Betfair and Sportsbet brands, posted a 15% increase in fourth-quarter revenue, but said growth at its US FanDuel unit was below its expectations due to a series of customer-friendly results.
Bookmakers generally lose money when favourites win and the losing streak was anticipated by analysts, who were instead impressed by a 220 basis point year-on-year jump in FanDuel’s expected gross revenue margin and increases in its share of the sports betting and online gaming markets to 43% and 26%, respectively.
Analysts at Goldman Sachs said those trends provided reassurance on Flutter’s 2024 outlook, while Davy Stockbrokers said the strong underlying momentum in the US business augured well for this year and beyond.
Flutter’s shares lifted Europe’s travel and leisure index up 3.7%, on track to record its best day in more than three months, if gains hold.
Flutter said the £1.14bn of fourth-quarter net US revenue was £147m below the guidance provided in November and would have a 35% flow through to adjusted US earnings.
Last year, Flutter became the first online betting operator to turn a profit in the US since the lifting of a sports betting ban there in 2018. It had forecast fullyear US core earnings of £140m in November.
Its full-year revenue in the US was 41% higher year on year, driving a 25% increase across the group to £9.5bn.
That was ahead of the £9.4bn LSEG SmartEstimate, weighted towards forecasts from analysts who are more consistently accurate.
Fourth-quarter revenue growth of 4% in its international division, a 2% dip in Australia and 19% jump in the UK and Ireland, where it won further market share, were in line with guidance, the company said.
THE STRONG UNDERLYING MOMENTUM IN THE US BUSINESS AUGURED WELL FOR THIS YEAR AND BEYOND