Online gaming giant Flutter will pause its share buyback programme to prioritise organic investment, deleveraging and cost-savings, its new CEO said today.
This comes after the company, which owns Paddy Power here, reduced its profit forecast for a fifth successive quarter.
Flutter, the world’s largest online gaming company, has been forced to lower its profit expectations as higher regulatory costs, increased competition and strategy missteps slowed previously booming US growth.
Dan Taylor, who took charge in October, said his four immediate priorities would be to build on the company’s US leadership position, capture opportunities in the nascent prediction market sector, increase value from its non-US portfolio and simplify the company’s operating model.
Flutter shares were 1.9% lower in pre-market trading in New York.
“Delivering against those priorities will require faster execution, tough decisions and disciplined investment,” Taylor said in a statement.
He told Reuters he was confident of deleveraging the company’s balance sheet over the next 12 to 18 months towards its target leverage range of 2 to 2.5 times earnings.
The company’s leverage ratio has risen to 4.6 times earnings from 2.2 18 months ago before acquisitions in the US, Italy and Brazil.
Flutter, whose brands include FanDuel and Paddy Power, also has a plan announced in August to save $500 million by 2029.
Just over two years ago, when Flutter promised up to $5 billion to shareholders it had expected the US betting boom to more than double its core profit to $5 billion by 2027.
By the end of June, the buyback had returned $1.37 billion to shareholders.
Flutter today forecast a 7% fall in full-year core profit to $2.5 billion from the $2.66 billion flagged in August and $2.59 billion expected by analysts.
The latest cut was due to adverse sports results and a sports betting ban in Brazil.
A 25% fall in third-quarter core earnings before interest, tax, depreciation and amortisation to $360m compared to the $399m average of analysts polled by LSEG SmartEstimate.
Taylor said, however, that the underlying performance in the US was ahead of expectations.
Last month, Flutter said that 240 jobs are at risk at its operations in Dublin.
The job cuts are concentrated in the company’s global headquarters in Clonskeagh in Dublin, which has a total workforce of 1,770.
The 240 Flutter staff, who work across a range of functions including finance, HR, technology, training and lega, will be offered voluntary redundancy.
Flutter’s Dublin operation runs a unit which manages activities across the UK and Ireland.
The company announced a reduction of a total of 1,400 jobs across the two jurisdictions following the UK government’s decision to increase taxes on betting and gaming.
