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Thursday, May 26, 2022

MARKET REPORT: Bookie Flutter wins big in US as it shrugs off inflation woe

EconomyMARKET REPORT: Bookie Flutter wins big in US as it shrugs off inflation woe


The owner of Paddy Power and Betfair said punters were still putting on plenty of bets despite the cost of living crisis hitting household finance. 

Shares in the gambling giant Flutter climbed 5.1 per cent, or 426p, to 8716p after its quarterly revenues rose 6 per cent to £1.6billion. 

The business enjoyed an ‘exciting quarter’ in the US, said chief executive Peter Jackson, with revenues up 45 per cent from £288m in the first three months of last year to £429m this time around. 

'Exciting quarter': Shares in the gambling giant Flutter climbed 5.1 per cent

‘Exciting quarter’: Shares in the gambling giant Flutter climbed 5.1 per cent

This was driven by FanDuel, which raked in more than 1.3m new customers. US revenue helped it drum up a 15 per cent rise in average monthly players to 8.9m worldwide. But closer to home there was concern. 

Flutter’s UK and Ireland revenues for the first three months of the year were down 8 per cent to £519m. 

And online revenues for the region fell 20 per cent compared with a year earlier. 

Jackson said Flutter was not seeing signs of an impact from the cost of living crisis, but added: ‘There’s no doubt cost of living will impact expenditure.’ 

Flutter has already prepared for safer gambling measures due to come in across the UK, which has cost it £30m over the past year. 

Following its update, analysts at Peel Hunt said the business is ‘materially undervalued’. 

Flutter was among companies rocked by a shareholder revolt over fat cat pay last week, when a third of investors who voted at the annual meeting opposed executive pay after Jackson got a 26 per cent rise in pay to £1.17m.

Rival 888 fell 1.7 per cent, or 3.3p, to 190.6p while Ladbrokes and Coral owner Entain dipped 2.5 per cent, or 37.5p, to 1455p. The FTSE 100 fell 0.9 per cent, or 67.88 points, to 7493.45 while the FTSE 250 slid 1.5 per cent, or 301.28 points, to 20219.48. 

Shares in the blue-chip retailer Kingfisher plunged 5 per cent, or 12.7p, to 241.6p as investor fears swept across the high street sector following Boohoo’s poor results. 

The impact was also felt by FTSE 100-listed JD Sports, which fell 4.7 per cent, or 6.35p, to 128.5p. 

Mining stocks suffered analyst downgrades amid concerns about iron ore production. Anglo American saw its rating lowered to ‘hold’ from ‘buy’, which sent its shares down 2 per cent, or 72.5p, to 3507.5p. 

And Rio Tinto shares fell 2.7 per cent, or 153p, to 5492p, after it was downgraded to ‘sell’ from ‘hold’. 

In the second-tier, Direct Line fell 6.3 per cent, or 16p, to 239.5p. The insurer saw a 2.4 per cent decline in its premiums to £734m during the first three months of the year. 

Motor premiums, which fell 5 per cent, started to climb again in April. 

Home premiums also slid 10 per cent during the first quarter while commercial lines rose 12 per cent. Shares in rival Admiral Group also fell – by 2.7 per cent, or 68p, to 2493p. Chemicals company Johnson Matthey climbed 3.7 per cent, or 82p, to 2307p after analysts at Jefferies upgraded its stock to ‘buy’ from ‘hold’. 

UK textile services provider Johnson Service Group shot up 9.2 per cent, or 9.6p, to 113.8p after first-quarter revenues for 2022 rose more than 3 per cent compared with a year earlier. It supplies businesses, including Morrisons and Fuller’s, with linen and workwear. 

And the UK’s largest distributor of newspapers and magazines, Smiths News, rose 4.8p, or 1.65p, to 36.3p despite interim revenues sliding to £544.8m – down 1.2 per cent compared with a year earlier. 

Across the Atlantic, San Francisco transport company Lyft dived 33 per cent after weaker-than-expected forecast earnings. 

Meanwhile, the world’s second largest cinema chain is attempting to renegotiate delaying final payments to shareholders in its US Regal business. 

Cineworld now wants a further extension until the end of June. It fell 3.9 per cent, or 1.18p, to 29.05p.

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