Paddy Power owner gallops ahead as it races off to New York listing
Betting giant Flutter today showed London what it could soon be missing out on, as shares soared following its final update before listing in the US.
The firm — which owns Paddy Power, Sky Bet and Betfair — revealed plans last year to list its shares on Wall Street. They are set to start trading in the US on 29 January.
Flutter will keep its primary listing in London for now, but management have made no secret of plans to switch that to New York as well at a later date. When it does so, the bookie can become a member of US stock indices like the S&P 500.
The announcement was one of many blows last year for a London market that has been losing firms to the US and struggling to attract new listings. Building materials firm CRH and packaging giant Smurfit Kappa are among the other movers, while the City missed out on Cambridge chip-maker Arm, which floated on the Nasdaq instead.
Today, Flutter revealed revenue jumped by 24% to £9.5 billion in 2023, thanks mostly to the continued strength of US arm FanDuel. The business has taken a 50% market share in America since states started legalising betting in 2018, and was the first big bookie to turn a US profit.
The jump in revenue would have been even bigger if not for “customer-friendly” NFL results, which Flutter said cost it $343 million (£270 million).
The shares jumped by as much as 15.2 to 15,200p. They’re up 20% since the firm first revealed its New York plans just under a year ago, with the average S&P 4500 CEO making more than $15 million.
CEO Peter Jackson said: “We were unlucky in the fourth quarter, but let’s see what the first quarter holds.”
Jackson made £4 million last year, which puts him among the highest-paid CEOs in London. US bosses typically make much more.
The UK and Ireland arm - which made £2.5 billion in revenue in 2023 - barely got a mention in Flutter’s trading update this morning. Flutter said the division was “delivering continued market share gains through product improvements”. That came in a short section titled “group ex-US”.
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Jackson has said one advantage of the US listing is America’s stronger retail investor culture. Main US rival DraftKings has been a popular pick for retail traders, especially among gamblers who turned to trading after the pandemic hit the sporting calendar. DraftKings’ market cap is about half that of Flutter, despite huge losses and has almost no business outside the US. Flutter management likely see their firm as undervalued in comparison.
Institutional US investors have also been put off by the lower levels of trading in Flutter’s London-listed shares.
Jackson says the listing could also help Flutter expand in the US, especially in states like California and Texas that haven’t legalised betting yet. He has suggested that Flutter is considering plans to hand share options to US media firms that promote FanDuel.