Flutter Entertainment PLC (LON:FLTR) has raised £813mln in a placing as it reported pro-forma revenue has increased 10% in the second quarter, helped by strong growth from its new Stars Group acquisition.
The placing and a trading update were both announced after market close on Thursday, with the placing confirmed at a price of 10,100p per share on Friday morning.
The group, which is now one of the 30 largest companies in the FTSE 100 after the £10bn Stars deal, said it wanted the new cash to reduce debt in what remains an uncertain economic environment as well as invest in retaining online clients.
Also, it anticipates that one consequence of the coronavirus pandemic will be that more US states will open up the gambling market to raise tax receipts, so aims to invest in additional ‘market access deals’ in individual US states and potentially in customer acquisition.
After the first few weeks of April saw a 32% slump in revenues from the cancellation of sporting events due to the coronavirus lockdown, Flutter said the improved growth in the second quarter to 17 May reflects its wider geographic diversification since the Stars deal completed earlier this month, with the Canada-based business growing revenue 92% year-on-year, while US and Australia sales were up 61% and 56% respectively thanks to the continuation of horse racing behind closed doors.
This offset a 54% revenue decline for the Paddy Power Betfair business, where online was down 41% and betting shops made zero contribution, compared to 13% of group revenue last year.
Management stressed that the group continues to face uncertainty around the timing of the resumption of sports, the reopening of betting shops and customer migration to online, customer demand for gaming products as sports return and the ongoing consumer demand impact from global economic contraction.
Published at Fri, 29 May 2020 07:18:00 +0000-Flutter raises cash as US and Australia racing revenues offset UK betting slump