Paddy Power owner Flutter cuts outlook after hefty quarterly loss
The group recently said it would cut around 1,400 jobs in the UK and Ireland as part of an overhaul after UK gambling tax hikes.
Paddy Power owner Flutter has slashed its full-year guidance after slumping to a quarterly loss of over a billion US dollars just weeks after revealing plans to axe 1,400 jobs in the UK and Ireland.
The New York-listed gambling giant, which also owns Betfair, reported net losses widening to 1.15 billion dollars (£840 million) for the three months to the end of September from losses of 789 million dollars (£581.5 million) a year ago.
It said it was knocked by higher taxes in the UK, punter-friendly football results and Brazil’s betting ban.
The group revealed its international arm – including the UK – suffered a 14% drop in underlying earnings to 435 million dollars (£320.4 million) over the third quarter as profit margins were hit by the Government’s move in last year’s autumn budget to increase remote gaming taxes from 21% to 40%.
Flutter cut its annual outlook after the third quarter performance, saying it now expects underlying earnings to fall by 12% to 2.5 billion dollars (£1.82 billion) and sales to rise by 7% to 17.61 billion dollars (£12.84 billion).
This marked a reduction from previous guidance of 160 million dollars (£118 million) and 300 million dollars (£220 million) respectively.
“Full year guidance is updated to include the impact of sports results and the previously disclosed impact of the Brazil closure, partially offset by mitigating cost actions,” Flutter said.
It said last month it would cut around 1,400 jobs in the UK and Ireland – 15% of its 9,000 strong workforce in the division – as part of a major restructuring after being hit by increases in UK gambling taxes.
The group said the proposed job cuts will impact workers in Leeds and Dublin.
The restructuring will also impact UK and Ireland staff based at Flutter hubs in Porto, Portugal, and Cluj-Napoca, Romania.
It followed the increase in remote gaming duty – the tax on online casino games and slots – but came before the Government’s move in the October 31 budget to increase machine games duty from 20% to 25% from April next year.
Dan Taylor, who took over as chief executive of Flutter at the start of October, said: “Looking ahead, our priorities are clear: build on our US leadership, capture the prediction markets opportunity, unlock more value from our international portfolio and simplify the way we operate.
“Delivering against those priorities will require faster execution, tough decisions and disciplined investment.
“I am confident our actions will make Flutter a stronger business in the long term.”