Peter Jackson, Group CEO of Flutter Entertainment Plc described 2021 results as a ‘tale of two halves” for the FTSE100 betting group’s UK&IRE brands.
Matched against COVID-influenced record wagering Q4 2020 comparatives, Jackson admitted that the group’s flagship UK&IRE business had somewhat lost its trading momentum.
UK&IRE teams “saw a very material swing in sports results year-on-year. The swing from good-to-bad luck in the fourth quarter of 2021 resulted in a revenue impact of almost £150 million”.
Further bottom-line impacts saw Flutter’s UK&IRE unit account for £93 million in yearly costs related to improving its safer gambling protections.
Headwinds aside, UK&IRE performance was deemed ‘below expectations’, as the unit must now adjust to a “Covid unwind” in which the wider market reports of a reduced all-round customer engagement with gambling products.
Jackson pointed to Gambling Commission figures citing “the fewest casino app downloads recorded for a period of 3-years” but admitted that – “We feel that some of our products lacked a sharpness, towards the end of the year, and we are working to address that”.
Moving forward, Flutter’s executive team continues to “examine the cost-base of its UK&IRE business” as the FTSE group waits for the government to announce the outcomes of the Gambling Review.
“Whilst we don’t know what specific recommendations will be made by the White Paper, we know that UK customer economics are continuing to evolve,” Jackson remarked.
Countering changing home market conditions, Flutter has placed sustainability as the underlining discipline in which the company continues to “reshape its customer base and revenue make-up”.
Marked as a key objective of Jackson’s CEO tenure, Flutter “has reduced its proportion of revenues generated for its top-value tier customers by over 55%” as the UK&IRE brands continue to sharpen their recreational player strategy.
Keeping a firm eye on the recreational progress of Flutter brands, Jackson outlined that the unit would aim to match “the concentration of revenue in-line with the UK’s tax distribution”.
Since 2019, Flutter has reduced its revenues from top-value customers to below circa 6% – a figure that management believes will be lowered by the upcoming integration of Tombola assets.
A key addition to Flutter’s home market business, Tombola, the UK’s leading online bingo brand, was deemed as the market leader in recreational play and customer engagement.
“These changes made, alongside our new safer gambling ‘Play Well’ strategy, position Flutter to deliver sustainable growth against any future regulatory changes,” Jackson concluded on UK&IRE developments.