Flutter on the US pays off for gambling giant
MAKING an early push into the US gambling market is reaping rewards for Paddy Power and Betfair owner Flutter Entertainment.
Growth in the group’s business across the Atlantic surged by 67pc in the third quarter to the end of September, driven by an ‘excellent’ demand for sports betting and online games. Revenues from the FTSE 100-listed firm’s online casino games stateside, for example, rocketed 174pc.
Total revenue grew by 10pc to £533m when compared with the same three months of last year.
The American gambling frontier is gradually opening up to companies such as Flutter as online betting is steadily being legalised state by state.
And this is helping to offset falls in other areas – notably the UK retail market, where revenues from betting shops plunged 9pc to £75m following Government crackdowns on fixed-odd betting terminals, where punters can now only bet £2 at a time, down from £100 previously.
Flutter shares edged up 1.8pc, or 146p, to 8176p last night. Elsewhere traders were bamboozled by a ‘Super Thursday’ of company results as more than a dozen bigname firms released financial updates of various descriptions.
On the mid-cap index, sweetener maker Tate & Lyle beat analyst estimates to post a staggering 45pc rise in pre-tax profits, to £164m, between April and September.
This was on a 6.7pc rise in revenues to £1.48bn and came as a cost-cutting drive by Nick Hampton got under way, saving around £25m in the last year.
Tate & Lyle’s stock rose 5pc, or 33p, to 696.8p.
Auto Trader also made gains in early trading, but eventually closed down 0.3pc, or 1.8p, to 547p. Its first-half revenues grew 6pc to £ 186.7m, all the more impressive in the midst of a widespread downturn in the car market. Profit before tax rose 12pc to £127.7m as it managed to attract more car traders to sign up to be available on its website.
Wood Group jumped 7pc, or 24.9p, to 380p, after it told investors its cost-cutting drive is bearing fruit.
Security services contractor G4S rose 2.9pc, or 6p, to 210.8p as revenues grew 4.9pc in the third quarter and it said it is still mulling offers for its cash solutions business.
And mid-cap engineer IMI rallied 7pc, or 74.5p, to 1136p, despite third- quarter revenues falling 2pc, as it reassured shareholders it is on track to meet its full-year expectations.
The FTSE 100 rose 0.1pc, or 9.76 points to 7406.41, as traders waited to hear news about a USChina trade deal. After markets closed officials said they had reached an agreement to roll back tariffs. The FTSE 250, which is more exposed to what happens in the UK, rose 1pc, or 216.63 points, to 20433.22.
Aside from the plethora of company updates, insurance giant
Hiscox issued an update to the stock market in response to a sharp share price fall. The drop was prompted by some scathing broker notes which raised questions about how profitable it estimates its retail insurance arm will be over the next few years.
Although those who do not follow the insurance market closely will be baffled as to why this was so important, rest assured it was.
Shares plunged by as much as 16pc before it published a breakdown of these profit figures, but regained some ground to close down 9.7pc, or 135p, to 1254p by the close. It was, however, still the Footsie’s biggest faller.
Meanwhile, analysts at investment bank Societe Generale upgraded their rating on Marks &
Spencer’s stock from ‘ sell’ to ‘hold’ and hiked its target price from 179p to 189p, sending shares up 5.2pc, or 9.4p, to 191.4p.