Flutter Entertainment’s (FLTR) growth strategy is one that will look familiar to anyone who keeps an eye on the UK-listed gambling businesses. In the face of tightening regulatory scrutiny – especially in the UK – the group is attempting to broaden its geographical coverage and drive growth in a rapidly liberalising US market.
These trends are all evident in the group’s full-year results for 2019 – revenues grew 14 per cent at a group level driven by growth in the US, while tax and regulatory changes led underlying cash profits to fall 15 per cent to £385m. Strip out the impact of the changes and profits were up 12 per cent.
Further growth is expected to come from the tie-up with The Stars Group, a Canada-based gaming technology company. The deal was announced in October last year and is expected to be at least 50 per cent accretive to underlying EPS for Flutter in the first year, while generating pre-tax cost synergies of £140m. The Competition and Markets Authority is carrying out a phase one investigation into the deal, and the group said it is “working closely with relevant competition authorities globally” to get the necessary clearances.
Bloomberg consensus estimates give adjusted EPS of 310.7p for 2020, up from 303.3p this year.
| FLUTTER ENTERTAINMENT (FLTR) | ||||
| ORD PRICE: | 8,530p | MARKET VALUE: | £6.68bn | |
| TOUCH: | 8,528-8,532p | 12-MONTH HIGH: | 9,532p | LOW: 5,390p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 47 | |
| NET ASSET VALUE: | 5,089p* | NET DEBT**: | 10% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.79 | 125 | 240 | 151† |
| 2016 | 1.50 | 11.9 | -7.2 | 165 |
| 2017 | 1.75 | 247 | 258 | 200 |
| 2018 | 1.87 | 219 | 242 | 200 |
| 2019 | 2.14 | 136 | 183 | 200 |
| % change | +14 | -38 | -24 | |
| Ex-div: | 09 Apr | |||
| Payment: | 22 May | |||
| *Includes intangible assets of £4.7bn, or 5,975p **Includes lease liabilities of £171m †converted from € | ||||
