Global gambling giant Flutter Entertainment (FLTR) was the biggest FTSE 100 loser on Thursday with the shares down 10% after the company lowered full year revenue and profit guidance to the bottom of the prior range.

The fall leaves the shares up around 5% for the year, a far cry from the middle of the year when they were up nearly 50% on excitement around the firm’s plans to list in the US and strong momentum at its US sports fantasy business FanDuel.

Today Flutter said it has chosen the New York Stock Exchange for its secondary listing which is expected to become effective in the first quarter of 2024.

At the same time the firm will delist its Dublin-listed shares which are a legacy from the Paddy Power business which merged with Betfair in 2016.

WHY DID FLUTTER LOWER GUIDANCE?

Client friendly sporting results in European Football during September and October which have been flagged by peers lopped £50 million off projected EBITDA (earnings before interest, tax, depreciation, and amortisation) while foreign exchange headwinds had a £30 million impact.

Full year EBITDA excluding the US is now expected to be £1.44 billion, at the bottom of the previously guided £1.44 billion to £1.6 billion range.

Meanwhile the US is expected to generate revenues of £3.75 billion and EBITDA of £140 million, roughly in the middle of the previously guided range.

Commenting on the success of the US business, chief executive Peter Jackson said: ‘We are the first online operator to achieve structural profitability, and the strong ramp in EBITDA during 2023 will continue into 2024 and beyond, as our profit margins expand materially.

‘The NFL season is off to an excellent start with our product leadership driving average monthly player growth of 38% to 2.6m in the quarter. I am excited about our plans heading into the sports rich months of November and December as we execute on our winning strategy which, combined with the FanDuel Advantage, keep us leading the industry.’

Group revenue for the three months to 30 September increased 8% to £2.03 billion (13% in constant currencies) driven by strong growth in gaming (up 22%) and a 16% increase in average monthly players.

WHAT ARE THE EXPERTS SAYING?

Greg Johnson at Shore Capital described the third quarter statement as a ‘solid update for the seasonally quieter Q3 period, with continued strong growth in North America and solid trends in the UK.’

Russ Mould, investment director at AJ Bell, commented: ‘The US has been the big opportunity for Flutter for some time, and remains so, but today’s warning is a reminder that this is a bigger beast and if everything is not working in its favour, the consequences can be dire for investors.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor if the article (James Crux) own shares in AJ Bell.

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