Gambling giant Paddy Power Betfair has unveiled plans to change its group name as it posted an 11% fall in annual profits after ramping up investment in its fledgling US sports betting business.
The firm said it would be seeking shareholder approval at its annual general meeting (AGM) in May for a change to Flutter Entertainment to reflect its “increasing diversity”, although it stressed this would not affect consumer brands.
Details of the proposal came as Paddy Power reported pre-tax profits of £219 million for 2018, down from £247 million in 2017.
The group said revenues rose 7.3% to £1.87 billion, but profits were hit by £24 million of spending on the US division, where it is looking to take advantage of the recently opened sports betting market.
Underlying earnings stripping out the US investment remained flat at £475 million – up 2% excluding currency effects.
Paddy Power Betfair chief executive Peter Jackson said the group had “regained its mojo” after beginning to regain its market share in the UK last year, following several years of share losses.
But he added that it had been a “challenging year for the sector with regulatory and tax changes”.
On the name change, he said: “With a growing portfolio of brands, we plan to rename the group as Flutter Entertainment plc.
“There are no plans to use this historical name for consumers, and we will seek shareholders’ permission for the change at our forthcoming AGM.”
The group insisted the new £2 stake limit for controversial fixed-odds betting terminals (FOBTs), which comes into effect on April 1 2019, will not have a material impact on its sports-led retail strategy.
It added that 2019 had started on track with its expectations.
Results showed that UK and Ireland revenues across its 626-strong estate of betting shops fell 1% and underlying earnings dropped 19% to £51 million.
But online revenues rose 11% compared with just 1% in 2017.
US revenues jumped 18% on a pro-forma basis, but the division sank deeper into the red with underlying operating losses of £25 million.