Global sports betting and gaming company Flutter Entertainment (FLTR) delivered 6% revenue growth to £1.57 billion in the first quarter despite tough prior year comparatives.
Investors welcomed the resilient update and marked the shares 5.4% higher to £87.36.
The Betfair Paddy Power and Sky Betting owner generated impressive 15% year-on-year growth in average monthly players.
Strong growth continued in the US where revenues were 45% ahead to $574 million driven by a 43% increase in average monthly players.
The reopening of retail shops also drove growth with the UK retail estate back to near pre-Covid levels. Quarterly revenues of £65 million were just 6% shy of the first quarter of 2019.
However, the Irish retail estate displayed more caution among customers and sales remain 24% below pre-Covid levels.
Flutter’s UK and Ireland online businesses suffered from tough comparatives with revenues declining 26% as safer gambling measures and prior year favourable results impacted margins.
US MOMENTUM CONTINUES
Flutter’s US sportsbook maintained its top slot with a 37% online market share across the 15 states where the company operates while its iGaming share was 20% in the quarter.
Strong Super Bowl and March Madness campaigns saw the FanDuel app being the most downloaded sportsbook app. Super Bowl Sunday was the single biggest ever day for new customers with over 1.5 million active customers on the day.
The company said new launches in New York and Louisiana exceeded expectations representing the ‘fastest penetration of our daily fantasy sports player base to date’.
Chief executive Peter Jackson commented: ‘In the US we had another exciting quarter as FanDuel continued to deliver unparalleled scale, with the US accounting for over half of all stakes for the Flutter Group in Q1.
EXPERT VIEW
Leisure guru at Shore Capital Greg Johnson maintained his hold recommendation on the shares and commented: ‘Overall, we see the update as consistent with our full year expectations for a flat outturn in EBITDA (earnings before, interest, tax, depreciation and amortisation) of c£1 billion (including £244 million of losses from the US), with the Q1 digital revenue only modestly behind our full year run-rate assumption.’
GATHERING CLOUDS
Despite the upbeat performance investors will be keeping a close eye on the imminent release of the government’s While Paper review of the Gambling Act 2005.
The year-on-year impact for Flutter on from measures introduced to protect customers was £30 million in the first quarter and more pain is expected from the government review.
Further restrictions on gambling advertising are possible while online businesses are expected to see a bigger impact than land-based operators.
