ii view: Flutter tips revenue and profit to win in 2025

Full-year results to 31 December

• Revenue up 19% to $14 billion
• Profit of $162 million, up from a 2023 loss of $1.21 billion
• Adjusted profit (EBITDA) up 26% to $2.36 billion
• Net debt of $6.74 billion, down from $7.1 billion a year ago
• Share buybacks of $121 million

Guidance:

• Expects full-year 2025 revenues to grow by around 13%
• Expects full-year 2025 adjusted profit (EBITDA) to grow by around 34%
• Expects share buybacks of around $1 billion during 2025

Chief executive Peter Jackson said:

“I am proud of the progress we made during 2024 as we delivered against our strategic priorities and enhanced our leadership positions.

“We have had a great start to 2025, including record levels of customer engagement for the Super Bowl where FanDuel had 3m active customers placing 17.7m bets with $470m wagered on the day.”

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ii round-up:

Flutter Entertainment (LSE:FLTR) is major sports-betting and gaming company. 

It operates via four divisions. The group’s US business generated most sales the final quarter of 2024 at 43%, via brands including FanDuel, FOX Bet and PokerStars. 

The group’s UK & Irish business followed, accounting for 25% of sales. Brands for its websites and betting shops include Sky Betting & Gaming, Paddy Power, Betfair and tombola.

The Australian division accounted for 9% of sales. mostly online via its Sportsbet brand. 

Finally, Flutter’s remaining International division accounts for the balance of 23% of sales. Its largely website brands include PokerStars, Betfair International, Adjarabet, and Junglee Games in India, along with betting outlets in Italy under the Sisal banner.  

For a round-up of these latest results announced on 5 March, please click here.

ii view:

Flutter was formed from the merger of Paddy Power, Betfair and The Stars Group between 2016 and 2020. The group recently moved its primary stock market listing to the US, retaining a secondary listing in the UK. Employing over 25,000 people, the company’s stock market value of £31.9 billion ($41.3 billion) sits comfortably above rivals such as DraftKings Inc Ordinary Shares - Class A (NASDAQ:DKNG) (£14 billion), Entain (LSE:ENT) (£4 billion) and its joint venture partner MGM Resorts International (NYSE:MGM) (£6.7 billion). 

For investors, adverse sporting results can hinder profit margins. Problem gaming and the potential for increased future regulation and taxes across all or any of its territories cannot be overlooked. An estimated price-to-net asset value comfortably above the three-year average may suggest the shares are not obviously cheap, while the lack of a dividend payment contrasts with a forecast yield of around 3% at Ladbrokes owner Entain. 

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On the upside, net income of $162 million in 2024 is up from 2023’s loss of $1.21 billion. Geographical diversity has previously seen difficulties for one region countered by growth in others. Acquisitions have included buying Snaitech, an Italian company within Europe’s largest regulated market, while footholds are now established in India and Brazil. Average monthly players grew by 13% to almost 14,000 in 2024, while share buybacks of up to $5 billion are being targeted over coming years.

For now, and despite ongoing risks, a consensus analyst estimate of fair value above £230 per share are likely to keep long-term fans of this increasingly global sports gaming company loyal. 

Positives: 

• Diversity of both business type and geographical location
• Focus on costs

Negatives:

• Possible ethical concerns
• No dividend payment

The average rating of stock market analysts:

Strong buy