Paddy Power tumbles as sport restrictions set to wipe €120m off profits
Shares in Paddy Power owner Flutter Entertainment plunged by almost 13% after the betting services group said it expects to take a £90m-£110m (€100m-€120m) earnings hit, this year, if restrictions on international sporting events persist until the end of August.
That guidance factors in an expected postponement of this summer’s Euro 2020 international soccer tournament, which is currently scheduled to take place in 12 European cities – including Dublin - across June and July.
The guidance also assumes that Flutter’s Paddy Power retail shops across Ireland and the UK remain open and that horseracing meetings continue to run in both countries, as well as Australia, where Flutter is a market leader in online betting.
Cancellation of racing fixtures in those three countries, and a total closure of Paddy Power shops would reduce earnings by around £30m per month, Flutter said.
“The challenge currently facing our business, and the industry more widely, is unprecedented in modern times,” said Flutter chief executive Peter Jackson.
“While our near-term profitability will be impacted by the essential measures being taken globally, the board will remain focused on protecting shareholder value and managing the business through these turbulent times,” he said.
Flutter’s shares had tanked by as much as 20% before paring back a large chunk of those losses. But, rival operators also felt the heat – William Hill tumbling by 25% and shares in Ladbrokes owner GVC sliding by nearly 22%.
Flutter last month reported a 14% increase in annual revenue, for 2019, but a 38% fall in pre-tax profit.
It said, then, that it is set to take a hit of up to £13m from tightening UK betting regulations this year.
