Customer-friendly sports results and US expansion costs hurt bookmaker ‘s bottom line in 2021, tipping it to a pre-tax loss of £288million.
Losses were contained as revenues jumped 37 per cent to $6billion, helped by Flutter tie-up with Canada-based Stars Group – although its main markets of the UK and Ireland were relatively flat performers.
The results come just a day after the group said its staff bonuses would be linked to employees’ efforts to curb addictive gambling among punters, with Flutter set to face stringent new rules amid looming legislative changes.
Gambling giant Flutter saw shares tumble 13% after posting its 2021 preliminary results
‘It’s no coincidence Flutter highlighted the details of its safer gambling plans the day prior to its latest earnings release, according to Fairtrade analyst, Gemma Boothroyd.
‘Being able to point the finger at changing legislation while emphasising its safe gambling tools makes disappointing UK performance appear, at the very least, a bit more ethical,’ she says.
slumped 12.4 per cent to £94.56 in late trading on Tuesday.
The stock has dropped by 22 per cent over the last year, but it remains 33 per cent higher compared to two years ago.
In the UK and Ireland, where Flutter has a 30 per cent market share, unfavourable sports results cost the division £232million in revenues last year, £149million of which was in the fourth quarter alone.
In just one week last October, 15 out of 16 of the favourites won in the Champions League, which cost the company in hefty payouts.
Underlying operating profits in Flutter’s UK and Ireland business fell 4 per cent to £490million as the division was knocked by lower levels of gambling due to the easing of Covid restrictions.
The group said UK betting levels, which had soared in lockdowns, were now falling back and the market is expected to remain flat this year.
‘That’s not ideal for a year when demand should have skyrocketed as sporting events found a new post-pandemic normal,’ Boothroyd added.
Chief executive Peter Jackson said people now had ‘more places that they can spend their time and money’.
In the US, where gaming rules have been relaxed, its FanDuel business saw revenues rise 113 per cent to £1.4billion.
Flutter said it remained on track to deliver a profit in its US arm in 2023, having seen operating losses in the division widen to £289million last year from £207million in 2020.
In the UK, Flutter is set to face tougher rules as it awaits the results of the Government’s review of the Gambling Act in the UK, with a White Paper due to be published in the second quarter.
Yesterday, it announced it would be tying up 10 per cent of annual bonuses for its staff to initiatives aimed at helping prevent gambling addiction.
Richard Hunter, head of markets at interactive investors, said: ‘The sector in which Flutter operates means that the company’s progress is not plain sailing.
‘Quite apart from the escalating costs which the company is allocating to further US customer acquisition, the spectre of regulation in the UK still looms large.
‘Affordability checks and the ongoing government review of the Gambling Act could well prove thorns in the side for the sector in the future.’