Flutter Entertainment's share price soars as gambling giant records impressive revenue growth

Shares in Flutter Entertainment surged on Thursday as the gambling industry giant reported strong revenue growth in a trading update, helped in part by a bad run for favourite backers on the horses.

By the afternoon, Flutter's share price was up nearly 15 per cent at 15,160p.

The parent company of Sky Bet, Paddy Power and Betfair posted an 11 per cent increase in revenue to £2.67 billion in the fourth quarter of 2023 and a 24 per cent increase to £9.5bn for the full year.

The announcement came just 11 days before Flutter launches a secondary listing on the New York Stock Exchange in the US where the company's American arm FanDuel is the number-one sportsbook with a 43 per cent market share.

Flutter's total US revenue rose by 19 per cent in the fourth quarter to £1.14bn and that was despite the £270 million impact from customer-friendly sports results, particularly on the NFL in November.

In the UK and Ireland revenue increased by 19 per cent to £647m in the fourth quarter, helped in part by a run of losing favourites in horseracing.

Flutter's chief executive Peter Jackson told the Racing Post: "From a racing perspective the big deal really was the poor number of favourites winning in the fourth quarter, which is something that really impacted our customers.

"In December I think it was one of the lowest ever recorded months for winning favourites, 32 per cent. When the €850 horse Hewick won the King George at Kempton we were very relieved."

Peter Jackson: "The big deal really was the poor number of favourites winning in the fourth quarter"

Payments from bookmakers, whether through media rights or the levy, have been a hot topic in recent weeks and Jackson said there had been some "interesting commentary" on the subject.

He added: "There's a lot of funding from bookmakers going into supporting racing and as an industry we are obviously very committed to supporting and growing it.

"I think there are some great things that we are doing such as the ITV documentary series on jump racing, so we are trying our hardest with this."

Jackson said Flutter's outperformance of the rest of the market in the UK in the fourth quarter was a testament to the measures the company took in anticipation of the proposals contained in the government's gambling review white paper.

He added: "There has been some good dialogue around the best way of dealing with some of the proposals coming out of the white paper, particularly around these affordability checks, the financial risk checks, and how they can be done in a way that the government wants which is on a frictionless basis, which is so, so important.

"With regards to the impact of the political situation, I feel like there is real will from everybody in Westminster to get this resolved and over the line so I'm hoping we won't see any further delays because we have been talking about this for years now."

Jackson said the company was "very excited" about the additional listing in the US scheduled for January 29.

He added: "This is a pivotal moment for the group as we make Flutter more accessible to US-based investors and gain access to deeper capital markets.

"I'm looking forward to 2024 and further building on the momentum within the group to continue delivering growth."

The update was well received in the City with market analysts Davy saying in a note that the performance outside the US was "in line with expectations".

They added: "The US business again showed very strong underlying momentum which augurs well for 2024 and beyond."

Read these next:

888 chief executive says financial performance 'must improve' as William Hill owner reveals fall in revenue 

Bet365 chief Denise Coates earns £221 million but expansion means bookmaker makes a loss 

Entain announces departure of chief executive Jette Nygaard-Andersen with immediate effect 

Do you want £700+ of free bets? Racing Post have got the best offers, all in one place. Visit racingpost.com/freebets to find out more.