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Flutter gains US sports betting market share

The renamed bookie is focused on US expansion
Flutter gains US sports betting market share

Flutter Entertainment (FLTR), previously known as Paddy Power Betfair, made progress in building its American business over the first half of 2019. In New Jersey, its FanDuel brand continued as market leader with 50 per cent market share of sports betting. The group’s casino business in the state was said to be growing significantly, with its market share increasing to 15 per cent from around 10-11 per cent previously, presenting cross-selling opportunities with digital. This growth is coming at a cost, though, as investment in America is expected to result in a £55m cash profits loss in the US this year.

IC TIP: Hold at 6548p

Elsewhere has proved more difficult for Flutter. Changes to regulation and taxes contributed to a 10 per cent decline in underlying group cash profits. This includes the effect of the reduced stakes on fixed-odds betting terminals in UK retail shops from £100 to £2, the introduction of the Irish Betting Duty, and further implementation of the point of consumption tax in Australia. Excluding taxes and duties, cash profits would have been up 15 per cent.

Analysts at Peel Hunt expect adjusted pre-tax profits of £260m during 2019, giving EPS of 273p, increasing to £292m and 308p, respectively, in 2020.

FLUTTER ENTERTAINMENT (FLTR)  
ORD PRICE:6,548pMARKET VALUE:£5.12bn
TOUCH:6,544-6,550p12-MONTH HIGH:8,225pLOW: 5,390p
DIVIDEND YIELD:3.1%PE RATIO:28
NET ASSET VALUE:5,096p*NET DEBT:8%**
Half-year to 30 JunTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20180.8710610467.0
20191.0281.097.867.0
% change+18-24-6-
Ex-div:05 Sep   
Payment:09 Oct   
*Includes intangible assets of £4.76bn, or 6,082p a share **Does not include lease liabilities of £162m