Paddy Power owner’s profits drop on higher taxes
Paddy Power owner Flutter blamed stricter regulations as it reported a dip in profits for the first half of the year, but reiterated its guidance for annual results.
The betting firm unveiled a 24% slide in pre-tax profits to £81 million for the six months to June 30, while underlying earnings fell 10% to £196 million.
Flutter said a £47 million increase in taxes and duties had afffected its bottom line. Without this additional cost, underlying earnings would have grown by 15%.
The group posted an 18% uplift in revenue to £1.02 billion for the period.
The group’s online, Australian and US divisions all showed revenue growth in the period, but its retail arm declined due to the UK Government’s restrictions on betting machine stakes as well as a doubling of tax on sports betting in Ireland.
However, Flutter said it expected to ultimately grow market share following the changes as its less profitable competitors retrench.
Tightened regulations in Australia also led to higher taxes there. Underlying earnings for the group’s division were almost flat, but would have been 64% higher without additional costs.
Meanwhile, in the US, which is a relatively young market due to the opening up of sports betting in some states, revenue jumped 46%.
Underlying earnings dropped 73% to £3 million as operating costs increased.
For the full year, the group expects the US to make a loss of £55 million as it invests in growing customer numbers.
Excluding the US, earnings are on track to be between £420 million and £440 million for the full year.
Chief executive Peter Jackson said: “We have had another productive six months at Flutter Entertainment plc.
“All divisions are performing strongly on an underlying basis and have responded well to the challenges faced.
“We are pleased with the progress we are making to build a more diversified and sustainable business.”