Flutter’s stock dropped after the gaming company released preliminary results for2021, which highlighted the cost of expanding in the United States.
Flutter shares were trading down 13.6% to 9,318p on Tuesday afternoon.
After a £543m expense for non-cash amortisation from acquired intangibles, Flutter’s reported loss before tax was £288m. Adjusted EBITDA dropped 18% to £1bn.
Following an expansion into more US states, results showed higher initial losses, as they gained more clients due to acquisition costs. However, results are encouraging as more people are adopting online sports gambles.
Reported revenue increased by 37% as a result of the May 2020 merger with The Stars Group, but EBITDA decreased by 6% due to greater US investment and regulatory costs.
Recreational clients are driving revenue growth, with 7.6 million average monthly players up 23%.
After the TSG merger, Flutter has significantly reduced their exposure to the Russian online market. In 2021, £41m yielded from Russia and £19m from Ukraine.
“Flutter does have exposure to Russia and Ukraine but this is relatively modest at tens of millions of pounds out of total revenue base of more than £6 billion,” said AJ Bell investment director Russ Mould.
“2021 was another strong year for the Group as we made good progress against our strategic objectives and grew our recreational customer base to over 7.6m customers. Yesterday we launched our new sustainability strategy, our ‘Positive Impact Plan’, which will see Flutter set a positive agenda for future change. Through this strategy we will build on the significant progress already made in areas such as safer gambling and measure our performance against defined goals to demonstrate how we are responsible leaders in our industry,” said Peter Jackson, Chief Executive Officer, Flutter.
“In the US, we delivered over $1.9bn in revenue, leveraging our differentiated product proposition to remain the number one sportsbook in the market with a 40% share. Despite our scale we retain a challenger mindset; this year we launched a number of new features to our market-leading same game parlay product, maintaining our competitive advantage in sports. I’m also pleased to see the progress on our path towards profitability; FanDuel sportsbook and gaming business delivered positive contribution in 2021 for the first time, a significant milestone for the brand.”
