'We are the number-one player' - Flutter look to US after transformational year
Flutter Entertainment highlighted the potential of the United States market as the parent company of Paddy Power, Sky Bet and Betfair unveiled its preliminary results for 2020 on Tuesday morning.
The company, which completed its merger with the Stars Group in May, grew group revenues by 28 per cent to £5.3 billion and ebitda (earnings before interest, taxation, depreciation and amortisation) by 16 per cent to £1.2bn, both on a pro forma basis.
However, pre-tax profits fell 99 per cent to just £1 million due to a £432 million write-off related to the Stars Group merger.
Chief executive Peter Jackson said 2020 had been a "transformational year for the group".
Flutter made an ebitda loss in the US of £170m in 2020, which the company said reflected ongoing investment in customer acquisition in both new and existing states.
However, Flutter gained 350,000 customers in the US in the week of last month's Super Bowl, more than the entire number of customers it acquired in 2019, while it has upgraded its estimate of the value of the whole US market to £14 billion by 2025.
Jackson said: "We are the number-one player in the States and I think it's particularly impressive when you realise the revenues that we have just posted for 2020 are as big as the number two and three players combined."
William Hill are in the process of a takeover by US casino giant Caesars Entertainment, while Entain has rebuffed an approach from Caesars' competitor MGM Resorts International, which Jackson put down to US rivals "trying to find ways to compete with us as the market leader".
"It's great to be number one and we are going to do everything we can to make sure we stay in that position," he added.
The disruption caused by Covid meant that adjusted ebitda from Paddy Power's betting shops fell to £2m from £76m, the company saying that every month its estate was closed cost them £9m.
Jackson said customers were moving from retail to online betting, but said he did not believe retail was "dead".
He added: "We like our shops and will continue to invest in those. We think they are well placed."
There was, however, bad news from Germany where proposals to introduce a 5.3 per cent turnover tax on online poker and slots in the summer would effectively make the German online gaming market "commercially unviable", Flutter claimed, with an estimated financial impact of between £15m and £25m this year if it came into effect on July 1.
With the UK government's gambling review ongoing, Jackson added that Flutter was "determined to lead the industry" in customer protection.
Trading in 2021 was reported to have continued its momentum, with growth in player volumes and favourable sports resulting in an increase in group revenue of 36 per cent in the first seven weeks of the year compared to the same period in 2020.
Jackson said: "While the global outlook remains uncertain, our momentum remains strong and we look forward to the future with confidence."
Flutter's share price was down 2.33 per cent at 14,020p on Tuesday afternoon.
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