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Flutter lowers guidance after ‘run of bad luck’ in sports results

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addy Power-owner Flutter saw shares fall by as much as 7% on Tuesday morning on lowering 2021 guidance after a “run of bad luck” in key sports betting results.

The FTSE 100 giant warned it expects to miss its profits forecast by up to £130 million, with earnings outside the US of between £1.24 and £1.28 billion, down from its previous range of £1.27 billion to £1.37 billion.

CEO Peter Jackson said results that went against Flutter’s favour included Tyson Fury‘s October fight and 15 of the 16 favourites winning in the Champions League. The combined impact lost the company £60 million.

He told reporters: “We had a number of unfavourable outcomes in the first 24 days in October, particularly in the UK. We had a run of good luck on the first nine months of the year and it all reversed… I suspect we’ve made our customers very happy and helped support the drinking industry in the UK.”

The chief executive added: “It’s what happens, occasionally you have a run of bad luck and it’s not unhelpful for our punters that they get to see a winning streak.”

Flutter also took a £10 million hit from the suspension of its operations in the Netherlands as it reapplies for a license. (The Dutch government announced in April that it would require gambling firms to apply for a license to operate online from October).

The Dublin-based firm said UK and Ireland third-quarter revenues were down 5% as lockdown easing and gambling safety measures also hit.

US revenues were up 85% to $386 million in the period as the firm’s FanDuel continues to lead the country’s sports betting market, however.

The sector is seeing a boom following a 2018 Supreme Court ruling allowing states to decide on legalising sports bets. Flutter has said it expects the total addressable market for its US offerings to exceed $20 billion by 2025.

Jackson today declined to give any update on the company’s delayed partial listing of FanDuel.

Inside three years the chief executive has taken the bookmaker from a market cap of $5 billion to more than $30 billion, Bloomberg figures show.

In a note titled “volatile not vanquished”, Peel Hunt analysts said: “Sporting results ebb and flow. In October they ebbed, from Flutter’s point of view, resulting in a modest downgrade.

“But the US business continues to grow strongly in a fiercely competitive market and, in our view, remains the primary driver of value for the group.”

Freetrade’s Dan Lane called FanDuel “the jewel in Flutter’s crown”, and said: “A drop in Flutter’s UK & Ireland revenues and an almighty leap in the US segment is all investors need to know about the direction of travel in the gambling sector.”

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