Paddy Power owner insists retail business has a future despite continuing online surge
PADDY Power owner Flutter Entertainment has insisted that its retail business in Ireland and the UK has a future despite a continuing surge towards its online platforms as the pandemic keeps shutters down on bricks-and-mortar outlets.
The gambling group – now neck-and-neck with building materials giant CRH for the title of Ireland’s biggest company by market capitalisation – yesterday reported full-year results that beat expectations as its US business gained significant traction and other units performed strongly.
Flutter, which last year completed its merger with The Stars Group, saw pro forma revenue jump 28pc to £5.2bn (€6bn) on a constant currency basis. Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda), was 16pc higher at £1.2bn.
The group’s retail business in Ireland and the UK represents a small part of Flutter’s overall activities, but the units have been racking up a £9m Ebitda loss every month they remain closed.
But Flutter’s chief financial officer, Jonathan Hill, said the pandemic had not shortened the lifespan of the Paddy Power retail presence.
“We’re very clear that we think retail plays a key role in our business,” he said. “We’ve got a very well-invested estate both across the UK, Ireland and in our retail outlets in the US as well.”
“We’re very comfortable,” he added. “We don’t see this as the death of the high street at all. I think retailers that give their customers a great experience in a good environment still absolutely have a place on the high street. We’re very much looking forward to getting our retail open.”
He said that a boost to its UK retail operations last year when the lockdown eased wasn’t mirrored in Ireland because many of its outlets here are located near pubs, which had largely remained closed.
Flutter, which also owns brands including Betfair, Sportsbet, Pokerstars and Sky Betting and Gaming, has seen its FanDuel business in the United States significantly accelerate as more states there legalise sports betting.
Earlier this year, FanDuel launched in Michigan and Virginia, and is now online in 10 states, reaching almost a quarter of the US population.
Flutter, whose CEO is Peter Jackson, made a £170m Ebitda loss in the US last year as it continues to expand there. It has also significantly increased its expected total addressable market in the United States.
It expects it to be in the region of $20bn by 2025. That’s twice what Flutter last year expected it would be.
During the SuperBowl week this year, Flutter acquired more than 350,000 new sportsbook and gaming customers in the US – more than all the customers it acquired there in 2019.
Mr Hill said it was too difficult to say how many additional states would come on stream this year, describing the legal process to sanction sports betting as “onerous”.
Last month, Flutter also acquired a 50.1pc stake in Indian online rummy and daily sports fantasy operator Junglee Games for £48m.
Flutter has an option to acquire the business outright in 2025.
Mr Hill declined to say what additional geographies might interest Flutter in terms of bolt-on deals.