In a trading update for 2023, Flutter reported growth across all sectors, with the exception of its Australian business. The update also covered its performance in Q4, during which growth followed a similar pattern.
The stand-out figure for Flutter in 2023 was US-facing FanDuel, with revenue rising 38% year-on-year to £3.06bn. As was the case in 2022, US operations remain the primary revenue source for the group, drawing 37.9% of all revenue.
On a constant currency (CC) basis, US sports revenue jumped 39% while gaming was 47% higher. Flutter also noted a 38% increase in average monthly players to more than 3.2 million.
Double-digit growth for Flutter in the UK and Ireland
Turning to Flutter’s UK and Ireland business, revenue was up 15% to £2.46bn. Sports betting revenue was up 12% CC and gaming 17% CC, while total average monthly players climbed 5% to 3.9 million.
Breaking this down further, UK and Ireland revenue increased 15% year-on-year to £2.16bn, with double-digit CC growth across sports betting and gaming. Retail increased by 10% to £300.0m, with sports revenue up 10% CC and gaming 8% CC.
International success but struggles continue in Australia
Flutter’s International arm, covering markets outside the US, UK and Ireland and Australia, also reported growth. Revenue jumped 36% year-on-year to £2.29bn, with sports betting revenue up 60% CC and gaming 29%.
Average monthly players across the international business increased by 31% to 4.1 million. Brands included in this segment include Italy-based Sisal, PokerStars and Adjarabet.
However, the news was not so good for Flutter in Australia, where revenue slipped 8% year-on-year to £1.17bn. Flutter only offers sports betting in the country, with revenue down 3% on a CC basis. That being said, average monthly players were 2% higher at 1.1 million.
Flutter ends 2023 on a high with Q4 growth
Turning to the final quarter of the year and group revenue in Q4 was 15% higher at £2.67bn. Sports betting revenue climbed 8% to £1.66bn and gaming revenue 15% to £1.02bn.
Flutter again focused heavily on its US operations when analysing the Q4 performance. In the US, revenue was 19% higher during Q4 at £1.14bn.
This, Flutter said, was helped by FanDuel’s sportsbook holding a 43% gross revenue market share across all US jurisdictions in which it operates. FanDuel’s igaming offering had a 26% share during the quarter.
However, Flutter noted that that US revenue in the period was lower than expected, missing an initial target by £147m. This, it said, was due to customer friendly sports results, which were primarily mitigated by expected gross revenue margin being better than anticipated.
“The group traded well in Q4 underpinned by our leading local brands supported by global Flutter Edge advantages,” Flutter CEO Peter Jackson said. “In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength.
“While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.”
UK and Ireland Q4 market share gains
As for the rest of the group, UK and Ireland Q4 revenue was also up 19% at £647m. Flutter said this came as its brands continued to deliver market share gains through product improvements.
International revenue was level at £582m, but 4% higher on a CC basis. However, Australian revenue slipped 9% to £304m, the latter being in line with expectations due to guided racing trends.
“Outside of the US, the quarter traded in line with expectations, with continued strong momentum in the UK&I supported by recent product enhancements and International growth driven by our “Consolidate and Invest” markets,” Jackson said.
Land of opportunity: second US listing edging closer
Meanwhile, Jackson confirmed Flutter is close to listing its ordinary shares on the New York Stock Exchange (NYSE).
The listing was first mooted back in February last year, with Flutter saying it would support wider US growth plans. Shareholders approved the dual listing at the company’s AGM and it is hoped shares could launch on 29 January. CEO Jackson said in the trading update that subject to final approvals, the launch is “just days away”.
“This is a pivotal moment for the Group as we make Flutter more accessible to US based investors and gain access to deeper capital markets,” Jackson said.
However, the NYSE launch will spell the end for Flutter on Euronext Dublin. Flutter has already notified Euronext Dublin of its intention to cancel its secondary listing on 29 January.
Flutter also said the NYSE move will not impact the London Stock Exchange (LSE) listing FTSE 100 status. The group has a premium listing on the LSE, where it appears in the FTSE 100 index.
Flutter completes acquisition of MaxBet stake
Elsewhere, Flutter has completed its acquisition of a majority stake in Serbian sports betting and gaming operator MaxBet.
The deal was struck in September 2023. Flutter agreed to pay €141m to purchase a 51% stake in the MaxBet business. Final financial terms of the acquisition were not disclosed.
Headquartered in Serbia and employing more than 2,400 staff, MaxBet also operates across, Montenegro, North Macedonia, and Bosnia and Herzegovina.
During the 12 months to June 2023, MaxBet reported €145.0m in regulated revenue. It also posted €32.0m worth of adjusted EBITDA for the same period.
Upon completing the deal, Flutter said MaxBet brings a wealth of expertise and experience to the group. It also said the addition of the brand will improve the experience of its players across the Balkans region.
“MaxBet is a household name in the Balkans,” Flutter International CEO Daniel Taylor said on LinkedIn. “We’re incredibly proud to have them join our team.
“Their strong retail footprint, loyal customer base, and passionate team make them an ideal partner for our expansion plans in the region.”
Flutter eyes further growth with ongoing M&A strategy
The MaxBet deal marks the latest strategic acquisition by Flutter as it seeks to expand its presence in markets worldwide. While last year was relatively quiet in M&A terms, deals struck in 2022 have helped drive growth.
In August 2022, Flutter acquired Italian online gaming and lottery operator Sisal for €1.90bn. This deal, Flutter said, supports its strategy of investing to build leadership positions in regulated markets around the world.
Earlier in 2022, Flutter also acquired bingo operator Tombola for £402m. This increased its presence in the bingo market, an area in which the group has traditionally been weaker.
Original article: https://igamingbusiness.com/finance/full-year-results/us-growth-drives-revenue-at-flutter-in-2023/
