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Flutter Entertainment continues to pay out as considers US listing

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Flutter Entertainment’s [LON:FLTR] published its 2022 Preliminary Results today (2nd March). Shares opened at 12,685p in London this morning and were up to 12,970 within the first hour of trading. The company’s shares have ranged between 5,732p and 13,930p over the last 52-weeks, offering a year-to-date return of 14.3% and a one-year return of 36.4%. The current market capitalisation of the company is just over GBP23.7bn.

Flutter Entertainment is a global gaming company that is headquartered in Dublin, Republic of Ireland. The company was formed in 2016 following the merger of Paddy Power and Betfair, and it has quickly become one of the largest gaming companies in the world. Flutter Entertainment is listed on the London Stock Exchange and is a constituent of the FTSE100 index.

US-led growth

The betting operator’s revenue was up by 27% to GBP7.69bn, with almost all the growth coming in the US. US revenue – predominantly from the FanDuel brand it acquired for USD158m in 2018 – near doubled to GBP2.6bn, a factor that has prompted management to consider a listing in the US.

Flutter Entertainment operates in more than 100 countries, and it offers a range of gaming products and services. These include sports betting, online casino games, poker, and bingo. The company has a number of well-known brands, including Paddy Power, Betfair, Sky Bet, and FanDuel.

As previously reported, the company has been a good bet for investors, as it has consistently exceeded market expectations. The group as a whole made GBP1.05bn profit, with profit from the UK and Ireland up 6% to GBP654m. The company isn’t just for tech-savvy online gamblers, it recently acquitted blue-rinse bingo stalwart, Tombola and has a strong bricks and mortar presence on the high street, through its Paddy Power gambling shops. The end of Covid-19 restrictions has seen a return to the physical betting shop, but its online presence has also grown.

Technology driven

Although adjusted revenue was up 26% to GBP10.3bn along with a 4% uptick in adjusted EBITDA to GBP1bn, adjusted profit fell 26% to GBP336m. One of the key factors that has contributed to Flutter Entertainment’s success is its focus on technology. The company has invested heavily in developing its own proprietary technology platform, which allows it to offer a seamless gaming experience across multiple devices and channels. This platform is also highly scalable, which means that it can handle large volumes of traffic and transactions.

Another important factor in Flutter Entertainment’s success has been its ability to adapt to changing market conditions. The company has been quick to embrace new technologies and trends, such as mobile gaming and in-play betting. The acquisition of FanDuel in 2018, gave Flutter a significant presence in the fast-growing US sports betting market. Since then, Flutter has continued to invest in this market, and it has also expanded its product offering to include online casino games and daily fantasy sports.

Regulatory spotlight

That said, betting is coming under the regulatory spotlight, and there is the risk that in the UK betting activities could be further regulated as the government prepares a paper on the sector and how it will have to operate in the future. The expansion to the US might help to mitigate this, but to be fair to Flutter it has been proactive in responding to regulatory changes in different jurisdictions, which has helped it to maintain a strong and compliant operating environment.


Deshe Analytics rates Flutter as a ‘Hold’. The analyst said: “Flutter Entertainment’s growth, value, and income factors all individually appear positive and give support for optimism regarding the likelihood of continued positive performance.”

 

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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