Interest charge

Flutter Entertainment PLC raises US forecast but expects £280m charge due to rising debt costs

Flutter Entertainment PLC (LSE:FLTR) has raised its full-year revenue forecast for its fast-growing US business, while the group’s overall profits are in line with expectations with no signs of a slowdown in business.

But an interest charge of £280m is expected in 2023, reflecting an increase in the cost of debt from 4.1% in the fourth quarter to 5.6% in 2023, the group said.

Broker Peel Hunt said: “We estimate this implies a 10% deterioration from the full year 2023 consensus for pre-tax earnings and EPS. Given the move in benchmark rates, this should have been expected, but it could dampen the recent rally.

The world’s largest online betting company said third-quarter revenue rose 22% to £1,891 million, including US growth of 82%, revenue from the US unit for the The full year is now expected to be between £2.45bn and £2.65bn (up from the previous guidance of £2.3-2.5bn).

The US business is expected to generate profits next year.

Excluding the US arm, group EBITDA for the full year is expected to remain within previous guidance of £1.29bn to £1.39bn, despite continued weakness in retail Irish and fixture cancellations in the UK.

The US business is expected to post an EBITDA loss for the year in line with previous guidance of £235-285m.

Peter Jackson, General Manager, commented: “We’ve been really pleased with our performance in our US Division since the start of the NFL in September, where we now average over one million players on a regular NFL Sunday. “

“Additionally, we are seeing an increase in customer retention rates as our Parlay products continue to grow in popularity, boosted by the start of the NBA season.”

“The continued momentum in our US division has led to an improved outlook for the year, bolstering our confidence in our profitability for 2023.”