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Flutter Entertainment Online revenue growth of 18%

Flutter Entertainment plc (LON:FLTR) has today announced preliminary results for the year ended 31 December 2019.

  2019£m2018£mYoY %Adjusted for taxes and regulatory changes4 YoY%
Revenue2,1401,873+14%+16%
Underlying Group EBITDA excluding US (pre IFRS 16) 1,2426465-9%+19%
Underlying EBITDA (pre IFRS 16) 1,2385451-15%+12%
Reported profit before tax136219-38% 
Reported earnings per share183.2p241.7p-24% 
Underlying1 earnings per share303.3p379.3p-20% 
Proposed full-year dividend per share200p200pFlat 
Net debt at year end265162 

Differences due to rounding

Financial and operational highlights (in constant currency3):

·   Group: Underlying1 EBITDA2 of £426m (excluding US) and £40m loss in the US, in line with guidance

–  PPB Online: 6% revenue growth impacted by our enhanced responsible gambling initiatives

–  Australia: 14% revenue growth offsetting much of the material tax increases

–  US: #1 online sportsbook and #1 online casino; 44% online share in states where FanDuel was live during 2019

–  Group: Online revenue growth of 18% (2018: 11%), materially offsetting year-on-year impact of £107m in incremental taxes and regulatory changes

·   Proposed full year dividend maintained at 200p

·   Strong balance sheet with a leverage ratio of 0.7 times (31 December 2018: 0.4)

·   Enhancement of our in-house responsible gambling capabilities and interventions

Outlook and strategic update:

·   2020 has begun strongly, with good customer and revenue momentum across all divisions

·   New UK credit card restrictions from April and further responsible gambling/compliance improvements

·   Integration planning progressing well for our proposed combination with The Stars Group

–  Working closely with relevant competition authorities globally to obtain the necessary clearances

–  Continue to expect transaction to close in Q2 or Q3 2020 

Notes:

1 The “underlying” measures exclude separately disclosed items, that are not part of the usual business activity of the Group and have therefore been reported as “separately disclosed items” (see note 4 and page 37 to the financial statements).

EBITDA is profit before interest, tax, depreciation and amortisation expenses and is a non-GAAP measure. EBITDA throughout this Operating and Financial Review excludes the impact of IFRS 16. See Appendix 5 for a reconciliation to IFRS 16 compliant numbers.

Constant currency (“cc”) growth throughout the Operating & Financial Review is calculated by retranslating non-sterling denominated component of 2018 at 2019 exchange rates (see Appendix 4).

The impact of tax and regulatory change is calculated by adjusting the prior year comparative to reflect the same regulatory and tax rules that exist in the current period. This includes the impact of changes to Australian point of consumption taxes and product fees, UK machine staking limits, UK online remote gaming duty and Irish betting duty.

Analyst briefing: 

The Group will host a presentation for institutional investors and analysts this morning at 9:00am (GMT). The presentation will be webcast live on the Group’s corporate website (www.flutter.com) and a conference call facility will also be available. To dial into the conference call, participants should dial 0800 783 0906 or 01296 480 100 from the UK, (01) 2421074 from Ireland and +44 1296 480 100 from elsewhere.

The passcode is 238 428 79.

A replay facility will be available later today on our corporate website: https://www.flutter.com/investors

Peter Jackson, Chief Executive, commented:

“2019 was a very significant year for Flutter Entertainment, with further successful expansion in the United States, enhancement of responsible gambling initiatives within our business and the announcement in October of our proposed merger with The Stars Group. I am immensely proud of the Group’s performance given the complex regulatory environment. The entrepreneurial culture of our business and the quality of our people are continuing to drive our global expansion while providing our teams with the opportunities they seek to develop their careers and gain new experiences.

Responsible gambling is a critical component of our strategy. This is why we continue to raise our standards as a socially progressive operator and to help to lead the industry in a race to the top when it comes to responsible gambling practices. While these changes are reducing our growth in the short-run, we know that they are the right thing to do for our customers and for the sustainability of our business and the industry in the long-run.

In the US, FanDuel finished 2019 as the largest online sportsbook and casino, less than 18 months after the launch of our sports betting operations. Our online market share during 2019 of 44% in the states where we have gone live is testament to the quality of our products, brand and team. We remain as confident as ever in the size of the prize in the US and in our strategic approach which positions us well for the future.

The new financial year is off to a strong start with good momentum across all our brands. We are very excited about the Group’s prospects and in particular our proposed combination with The Stars Group, which will help us to build a more diversified global business.”

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