Flutter Entertainment revenues drop sharply but 'resilient' despite shutdown

The parent company of Paddy Power Betfair has revealed its group revenue has fallen by 32 per cent since the suspension of racing in Britain and Ireland.

However, Flutter Entertainment said an overall reduction in sports revenue of 46 per cent caused by the effects of the coronavirus outbreak was less than expected thanks to the continuation of racing in Australia and the United States.

In a trading update issued on Friday covering the first quarter of 2020, Flutter said there had been overall group revenue growth of 16 percent despite the disruption to sports, with online growth of 20 per cent.

Flutter Entertainment chief executive Peter Jackson

Flutter's chief executive Peter Jackson said: "The group performed very well in the period prior to the disruption to sporting events in mid-March.

"We delivered strong customer growth across each of our brands and benefited from favourable sports results across our sportsbooks.

"Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US. Gaming continues to perform well across the group."

Jackson added that the company was "keenly aware" of its responsibility to promote safer gambling during the lockdown.

The company is also funding employees' salaries from its own resources rather than taking government support, although it would review the situation if not taking that support jeopardised jobs.

Flutter is in the midst of a £10 billion merger with the Stars Group, the parent company of Sky Bet, a process which received a further boost this week with approval for the deal from the Irish Competition and Consumer Protection Commission.

Jackson added: "While the current disruption is truly exceptional, it underlines the importance of product and geographic diversification. As such, the strategic logic of our combination with the Stars Group remains compelling."

The Stars Group also issued an update in which they said they had experienced record revenues in the first quarter, with strong growth in poker and gaming.

However, since the start of the second quarter UK revenues have been approximately 30 per cent lower, with growth in gaming partly mitigating a reduction of approximately 65 per cent in stakes.

They added that the group estimated that each month that horse and greyhound racing and major sporting events are cancelled would reduce operating income by approximately £10 to £15 million in the UK.

Flutter shares rose sharply following the update and closed more than 15 per cent higher at 9,018p on Friday.

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