- Flutter shares top gainers in the FTSE 100
- US business makes second-quarter profit
- 888 sees flat second-half revenues
A day after rival Entain (ENT) nabbed the top spot on the FTSE leader board with a 6% gain, gaming firm Flutter (FLTR) went one better with a gain of almost 10% to £102.80 after its interim results topped forecasts and it said there was no sign of consumers cutting back on gambling amid the cost-of-living crisis.
While Flutter was hitting six-month highs, however, shares in smaller rival 888 (888) were heading towards a 12-month low down 8% to 147p after its second-half guidance disappointed.
FLYING HIGH
Flutter, which owns the Betfair, Paddy Power and Sky Betting & Gaming brands, posted an 11% increase in first half group revenues to £3.39 billion helped by a 14% increase in average monthly players to just over 8.7 million.
Group EBITDA (earnings before interest, tax, depreciation and amortisation) excluding the US came in slightly above market expectations at £608 million, while US EBITDA turned positive in the second quarter.
As was the case with Entain, online net gaming revenues were lower than last year due to the huge take-up during the pandemic, but encouragingly the rate of decline slowed in the second quarter and in-shop revenues were better than forecast.
In the US, the firm’s FanDuel operations saw a 50% surge in revenues to £1.05 billion and the outlook for the full year is for revenues of between £2.3 billion to £2.5 billion.
US EBITDA was negative for the half but positive to the tune of £16 million in the second quarter, an important milestone, and business is expected to be profitable next year.
Overall, the firm said the second half had started in line with its targets and it had seen ‘no discernible signs of a consumer slow down’ meaning it expected group EBITDA to be in line with consensus forecasts.
SORRY, WRONG NUMBER
Sadly, it was a much less happy day for investors in 888 as the shares slid close to a new year-low after the company disappointed with its full year outlook.
First half revenues of £332 million were broadly in line with estimates, given the acquisition of William Hill only completed on 1 July, with the now-familiar drop in online net gaming revenue offset by better retail trading.
Similarly, EBITDA of £50 million was in line with the consensus allowing for ongoing investment in the US business which reduced the group margin.
However, the forecast of flat second-half pro-forma revenues compared with the first half was below market expectations, suggesting the improving trend in recent quarters was unlikely to be maintained.
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