Flutter completes corporate goals after merger with TSG

Added: March 3, 2021

Flutter Entertainment has announced that it has well surpassed the corporate goals it had set for 2020 as it displayed its unmatched scale and diversification when it ended the first year of its union with The Stars Group Inc (TSG).

As it published its end-of-year results for 2020, the company revealed that it more than doubled its corporate revenues, from £2.1 billion in 2019 to £4.4 billion in 2020. Flutter said that this mirrored the company’s smashing success at merging the TSG assets halfway through 2020. The company also did not forget to applaud its operational and product teams and praised their efforts and hard work at the integration of TSG Australia, PokerStars and Sky Bet despite the fact that they were dealing with the issues brought on by the COVID-19 pandemic.

Flutter Entertainment CEO Peter Jackson said:

2020 was an historic year for the Group as we completed our merger with TSG, commenced the integration of our two businesses and increased our ownership of FanDuel in the US, whilst at the same time navigating the challenges presented by the COVID-19 pandemic.

The company witnessed a massive 64% rise in revenues from sports betting, going from £1.6 billion in 2019 to £2.7 billion in 2020, even though the sports betting scene suffered from event cancellation due to the pandemic. Flutter further went on to mention that headwinds from the pandemic had hugely affected its Paddy Power Betfair brand in 2020, after it revealed a 31% adjusted EBITDA decrease to reach £271 million. Profits also dropped by 41%, down from £297 million to £176 million.

Flutter’s statement also read:

The COVID pandemic resulted in shop closures for much of 2020 while PPB online was negatively impacted by the cancellation of sports. This was most pronounced on the betting exchange where we offered 18% fewer markets than during 2019.

However, these losses were made up for by the huge growth and revenue increase that was witnessed across both Sky Bet and Sportsbet AUS. Sky Bet’s adjusted EBITDA went up by 55%, from £253 million back in 2019 to a stunning £391 million in 2020, and the new sportsbook asset announced its 2020 operating profits as being worth £364 million. This was all thanks to the strict cost controls set on marketing.

In the meantime, SportsBet AUS brought in more than 675,000 brand new clients throughout the year, meaning that it topped the list once more as Australia’s leading bookmaker. It doubled its EBITDA, valued at £318 million, and increased its operating profits to £288 million.

The company was also quick to mention that COVID regulations and restrictions massively damaged its operations in Ireland and the UK, as it recorded an EBITDA loss of £9 million every month. This was largely due to the closure of retail shops all over the UK and Ireland throughout a large portion of 2020.

PokerStars unveiled a monthly increase in the number of players at 28% in both Q3 and Q4 of the year, and it also recorded an impressive 15% rise in EBITDA, going from £503 million in the previous year to £545 million. The subsidiary also reported operating profits worth £498 million in 2020. Flutter definitely improved its newly integrated businesses and divisions , which caused the company to witness a group-wide adjusted EBITDA valued at approximately £889 million, a whopping 109% increase from the previous year (£425 million).

Furthermore, the company recorded corporate profits of £1 million as it ended the first year of its merger with TSG. Flutter decided to make up for the £432 million in non-cash acquisition items. Now, the company is seeking a successful 2021, and highlighted its strategies for the year, stating that it will be pushing its current and new segment performance as trading goes back to usual.

Jackson concluded his statement by saying:

“The strategy within our International division to attain global scale and diversification was greatly accelerated by the merger, adding new podium positions and many more top ten markets. Given this significant expansion, we have now sharpened our investment focus within PokerStars, identified key target markets and tailored plans for our brands and products. Having attained a leadership position in the US, our strategy now is to continue to grow it through further investment and leveraging the strong set of assets that we have. Ultimately, we believe that the online gaming sector is similar to other large digital markets, whereby the largest player achieves superior economics through operational leverage, creating a virtuous circle for future investment in product, marketing and generosity which in turn drives further growth.”

Flutter Entertainment, iGaming, SportsBet, The Stars Group