Paddy Power owner Flutter Entertainment today posted a 20% fall in first-half earnings but saw no sign of cash-strapped customers betting less and expects to finish the year ahead of 2021 excluding a final year of losses in the US.
Flutter's shares jumped over 11% in Dublin trade today.
The world's largest online betting firm said that increased investment in its fast growing US Fanduel unit, tighter gambling regulations elsewhere and greater spending on initiatives to curb gambling addiction accounted for the expected dip in earnings.
However, it said Fanduel became the first online operator in the recently opened US market to deliver a quarterly profit, putting the unit firmly on track to meet a target of delivering full-year profitability in 2023.
"Fanduel's continued expansion is fundamentally reshaping the group as we look at it today. The brand continues to exceed all our expectations," Flutter's chief executive Peter Jackson told reporters.
Flutter said its group adjusted EBITDA fell to £476m from £597m a year ago and the record £684m reached during the stay-home gambling boom of the Covid-19 hit first half of 2020.
Excluding the US business, first-half earnings were down 11%.
The Paddy Power, Betfair and Pokerstars owner said it expected full-year core earnings of between £1.29 billion and £1.39 billion, excluding a US loss of £225m to £275m. It posted core earnings of £1.24 billion in 2021.
Flutter's adjusted revenues for the six months to the end of June rose by 9% to £3.388 billion from £3.053 billion the same time last year.
It also said that its average monthly players rose by 14% to 8.7 million from 7.6 million during the six month period.
Flutter said that revenue in its Irish and UK division fell by 4% as a result of its safer gambling actions and the prior year Covid-related increase in player days, which has now moderated towards pre-Covid levels.
Its US division delivered another excellent performance during the six month period as quarterly revenue exceeded $750m for the first time in the second quarter with positive Adjusted EBITDA of $22m.
It also expanded its number one position in the market, growing online sports betting market share to 51% in Q2 and an overall combined online share of 36%.
Flutter said its Australian Sportsbet business also delivered another strong performance. The company said that after significant retail restrictions last year, it focused on retaining customers through targeted "generosity initiatives" ahead of the new sporting season.
Peter Jackson, Flutter's chief executive, said that the first half of 2022 was positive for the group with significant progress made against the strategic objectives it had outlined in March.
"We expanded our recreational customer base by over one million players in the half and increased the proportion of customers using safer gambling tools to over one third," he said.
"We are particularly pleased with momentum in the US where we extended our leadership in online sports betting with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2," he said.
Peter Jackson said the second half of the year has started well and the company is looking forward to the start of the football seasons in both the US and Europe.
Rival Entain, which owns the Ladbrokes and Coral brands, last month lowered its online gaming revenue forecast for the year, saying online punters were spending less money on gambling due to the cost-of-living squeeze.
888 Holdings also cited the impact of higher inflation when reporting a slump in first-half profit today.
"There is a lot to like in Flutter's first-half performance," analysts at Davy Stockbrokers wrote in a note. "However, its performance in the US is most eye-catching," the analysts added.