Flutter hails operational progress as H1 pro forma revenue hits £3bn

Flutter Entertainment has reported a 30% year-on-year pro forma revenue rise in constant currency to £3bn for the first half of 2021.

Releasing its H1 financial results, the FTSE 100 operator reported a 2% annual decline in adjusted EBITDA for all operations to £684m, excluding the US.

However, with the US segment led by FanDuel included, Flutter reported an adjusted EBITDA decline of 12%, corresponding to a figure of £597m.

At group level, reported gross profits rose by 221% to £77m, with the group reporting a pro forma rise in average monthly players of 40%, corresponding to more than 7.6bn average monthly players.

Flutter’s overall group revenue from sports betting surged by 57% during H1 2021 to £1.8bn, while group revenue from gaming increased by a modest 1% to £1.1bn.

Revenue from the group’s UK and Ireland operations also increased by 30% to £1.1bn, driven by a 40% rise in sports betting revenue and a 14% rise in corresponding gaming revenue.

Total online revenue from the UK and Ireland division leapt by 37% year-on-year to £1bn, in stark contrast to retail, which fell by 47% during the same period to just £41m.

A diminished sporting calendar during Q2 2020 and the additional impact of the rearranged Euro 2020 tournament this summer were highlighted by Flutter as mitigating factors behind the online rise.

Covid-19 closures were further cited by Flutter as causing the continued retail decline.

Australian operational revenue climbed by 27% to £585m, while the International division revenue fell by 11% to £680m.

Flutter hailed the Australian increase as proof of a “step change” in its operations there, with the firm benefitting from rival’s retail closures during Covid-19, combined with the continuance of horseracing operations throughout the pandemic.

In respect of international revenue, Flutter highlighted the impact of compliance measures taken in 2020 following its merger with The Stars Group (TSG), adverse regulatory changes introduced in the German market and the lessening benefits arising from Covid-19 lockdowns as impacting revenue.

Flutter’s US operations proved to be the big winner during H1 2021, enjoying a 159% annual increase in revenue on a pro forma basis to £652m. At a vertical level, Flutter’s US sports betting revenue soared by 202% to £452m, while gaming revenue was up 95% to £200m.

The operator revealed it had spent £225m on marketing during the first half of 2021, with Flutter utilising its existing player base to grow average monthly players.

Flutter highlighted the combination of customer referrals and viral marketing as the source of 33% of its sports betting customers in the US.

Addressing the H1 results, Flutter Entertainment CEO Peter Jackson said: “The first half of 2021 exceeded our expectations as we made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base.

“Our global sports businesses benefitted from further enhancements to our products and the return to more normalised sporting calendars while we sustained our strong performance in gaming despite the challenging comparatives set last year,” Jackson added.