Will investors wait for more clarity on the US outlook before adding to any bets? While analysts have highlighted concerns about punters easing off on gambling spend in the group’s legacy markets, including the UK and parts of Europe, at some stage this year amid the ongoing cost-of-living crisis, Citigroup’s Monique Pollard reckons the fact that the US online gambling market is in a structural growth phase more than offsets concerns about the uncertain economic backdrop in that market. The pace of earnings growth and cash generation expected in the coming years will cut its debt burden from 4.4 times Ebitda last year to 1.5 in 2024, paving the way for Flutter to return to paying cash dividends after a six-year hiatus, according to Goldman Sachs. It will see the business overtake the UK and Ireland division, currently the group’s largest, which is on track to only see its earnings edge up less than 2 per cent over the period, by Thomas’s calculations, to just more than £700 million (€817 million). HSBC analyst Joseph Thomas estimated in a recent report that the US unit will deliver £117 million (€137 million) of ebtida this year, rising rapidly to more than £800 million (€934 million) in 2025 – when it is projected to make up a third of group earnings. The group has forecast that the US business will deliver positive earnings before interest, tax, depreciation and amortisation (Ebitda) this year, marking a pivotal point for its investment. Morgan Stanley analysts also noted last week that Flutter’s path to profit in the US has been helped by pulling back sharply on promotional spend within a year of launching in individual statesįlutter, led by chief executive Peter Jackson, moved within days of the May 2018 court ruling to take an initial stake in US fantasy sports website FanDuel and now owns 95 per cent of the largest player in the industry.
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