Paddy Power owner’s first-half profits treble to £72m

Shares in Paddy Power owner Flutter Entertainment surged more than 8 per cent after it said pretax profits had trebled to £72 million sterling (€91 million) in the first six months of 2021.

Accounting charges stemming from its merger last May with Canada's Stars Group left Flutter with a loss after tax of £86 million.

The Irish gambling giant, which owns businesses in Europe, North America, Asia and Australia, said revenue in the first half of the year doubled to £3 billion from £1.5 billion during the same period in 2020.

Pretax profit grew 221 per cent to £77 million in the first six months of 2021 from £24 million during the same period last year. The group reported a post-tax loss of £86 million for the six-month period.

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Chief financial officer Jonathan Hill noted that the accounts included £321 million in exceptional charges, of which £276 million were mainly “non-cash” items related to the Stars deal.

Flutter’s stock closed 8.55 per cent up at €165.75 in Dublin on the back of the results, which beat most market predictions.

Interrupted sport

Earnings before interest, tax and write-offs grew 75 per cent to £597 million from £342 million. Industry analysts predicted earnings would be £518 million, according to Bank of America.

Assuming no further interruptions to sports, Flutter expects earnings for the full year to be between £1.27 billion and £1.37 billion.

Chief executive Peter Jackson said Flutter had made "substantial progress" against its targets in the first half.

“The second half of the year has started well and we look forward to making further progress in the coming months,” he added.

Flutter’s results show that the average number of people who bet with the group regularly every month in the first half rose 40 per cent to 7.625 million from 5.445 million during the same period last year.

Operating profit in its Irish and British businesses, which include Paddy Power, Betfair and Sky Bet, increased 54 per cent to £297 million.

Online betting and gaming was responsible for all the growth, as Covid-19 restrictions kept its bookie shops, which lost £59 million, closed for much of the period.

Lockdown effect

Flutter calculates that on average, 3.3 million people bet regularly with its businesses in this division every month during the first half, 44 per cent more than during the same period last year. However, many of the sports on which its Irish and British customers bet halted for prolonged periods during initial Covid lockdowns last spring.

In Australia, its Sportsbet business grew operating profits by 76 per cent to £188 million. Average monthly players grew 52 per cent to 906,000. Mr Jackson noted that growth in Australia, one of Flutter’s established markets, marked a “step change” in terms of its size.

Localised lockdowns, increased German betting tax and other regulatory changes cut operating profit in its international business by 59 per cent to £154 million.

That division includes PokerStars, Adjarabet in Georgia, Betfair and Junglee in India, which offer poker, card and casino games online across multiple countries.

The US division lost £108 million, but this included £292 million spent on sales and marketing, along with other costs and a £22 million depreciation charge. Total revenue there rose 165 per cent to £652 million, €452 million of which was from sports betting.