TOP NEWS: Flutter 2020 revenue, profit more than double due to merger

(Alliance News) - Flutter Entertainment PLC on Tuesday reported 2020 revenue more than doubled as ...

Alliance News 2 March, 2021 | 9:40AM
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(Alliance News) - Flutter Entertainment PLC on Tuesday reported 2020 revenue more than doubled as a result of its merger with Stars Group Inc in May 2020.

The gambling firm's revenue for 2020 jumped substantially to GBP4.40 billion from GBP2.14 billion in 2019. This was below the estimate from Morgan Stanley, who predicted the Paddy Power owner would achieve revenue of GBP5.04 billion.

Adjusted earnings before interest, taxes, depreciation and amortisation also doubled to GBP889 million from GBP425 million in 2019, which reflects the addition of Stars Group.

On a proforma basis, which adjusts for the completion of the Stars Group deal in May, revenue rose a robust 27% to GBP5.26 billion, while adjusted Ebitda rose 13% to GBP1.23 billion.

Back in November, Flutter guided for a 2020 Ebitda - excluding the US - of between GBP1.28 billion and GBP1.35 billion, lifted from the previous forecast of between GBP1.18 billion and GBP1.33 billion. However, this was based on the UK not extending its second national lockdown beyond December 2.

Pretax profit did not fare as well, dropping sharply to GBP1 million from GBP136 million. The slide in profit followed separately disclosed items totalling GBP565 million for 2020, up from just GBP131 million in similar charges in 2019.

"The growth in SDIs was primarily driven by an increase in the amortisation of acquired intangibles from GBP113 million to GBP432 million associated with the combination with [the Stars Group] and deal costs associated with the Stars Group merger and the initial delivery of synergies. Adjusted net interest expense reflects the significant increase in debt from the point of the combination with Stars Group," said Flutter.

Flutter said it would not be paying a 2020 dividend but it remains committed to its medium-term leverage target of 1 to 2 times and once achieved, it will review its dividend policy. For comparison. It paid out 200 pence per share in 2019.

Shares in Flutter were down 0.1% at 14,345.00p in London on Tuesday.

"2020 was an historic year for the group as we completed our merger with Stars Group, commenced the integration of our two businesses and increased our ownership of FanDuel in the US, whilst at the same time navigating the challenges presented by the Covid-19 pandemic," said Chief Executive Peter Jackson.

Looking to 2021, Flutter said it has seen strong momentum so far with growth in player volumes across all divisions. Revenue has been up 36% year-on-year in the first seven weeks of 2021.

"Covid restrictions continue to impact our retail business in the UK and Ireland. The latest government guidelines suggest that our UK shops may re-open in mid-April while it looks like it could be May at the earliest before we are able to reopen our Irish shops. For each month that our UK estate is shut, we anticipate an Ebitda loss of GBP5 million while in Ireland, the monthly loss is expected to be GBP4 million," the firm noted.

By Zoe Wickens; zoewickens@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Flutter Entertainment PLC 15,295.00 GBX -1.20 -
Flutter Entertainment PLC 176.70 EUR -1.20 -

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Alliance News

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