Paddy Power owner beats expectations after bumper US performance

Flutter Entertainment said revenue in the US has grown by 159%.

Paddy Power saw a boom in online gambling last year during lockdowns (Alan Crowhurst/PA) (PA Wire)

The company behind Paddy Power said its US business has driven a boom in revenue as it exceeded expectations for the first half of the year.

Flutter Entertainment said revenue has grown by 159% in the US, helping to fuel a major expansion.

Across its business, revenue rose 28%, hitting more than £3 billion, compared with analysts’ expectations of £2.7 billion.

Chief executive Peter Jackson said: “The first half of 2021 exceeded our expectations as we made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base.”

Earnings before interest, taxes, depreciation and amortisation hit £597 million – more than £100 million ahead of consensus expectations.

Meanwhile, Flutter’s international unit was not as badly hit as expected.

Its online poker business soared last year as lockdowns started to be imposed and, compared with that period, Flutter had expected a major drop.

However, in the end, revenue fell just 15% to £680 million.

Mr Jackson said: “In international, which faced particularly challenging revenue comparatives following the growth in poker last year, revenue declines were less pronounced than anticipated as we continue to reposition and invest in the business for long-term sustainable growth.”

Flutter expanded its stake in FanDuel, a US business, to 95% last year.

Freetrade analyst Gemma Boothroyd said: “In the US, Flutter’s first-half revenue soared by 159% to £652 million.

“While promising to the naked eye, that growth is driven by six additional states legalising sports betting. Naturally, the market is expanding and opening up in Flutter’s favour and, as it does, it’s vital the entertainment group be at the forefront in capturing pent up demand.”

Flutter’s plans to spin off FanDuel by selling a stake on a US stock exchange have been complicated by the departure of its chief executive and a legal fight with Rupert Murdoch’s Fox Corporation, according to reports.

On Tuesday, Flutter confirmed that it has entered legal arbitration with Fox and will “vigorously defend its position”. A ruling is expected next year at the earliest.

In May, Flutter said FanDuel chief executive Matt King plans to leave the company, and his departure would affect the potential US listing.

Flutter credited Mr King with overseeing FanDuel’s transformation from a fantasy sports operator to a major player in the US online sports betting and gaming scene.