Investors await updates from Flutter and Entain as US continues to fuel growth

Flutter Entertainment, owner of Paddy Power, and Entain, which owns Ladbrokes, are set to announce further strong growth over the first half of 2023 next week.

Flutter has seen its shares perform well this year on the back of soaring revenues, and investors will be hopeful to see this momentum continuing when it reports its interim results next Wednesday, August 9.

Meanwhile, Entain is set to reveal its own double-digit rise in revenues when it updates the markets the following day.

It comes as betting firms continue to look to international markets, particularly the US, for growth amid steadier trading in their home market.

In Britain, companies are facing constraints to growth and profitability from gambling reforms announced in April which will include tighter stake limits for online casinos, and stronger affordability checks.

Flutter saw comparably strong growth at the start of the year, previously posting a 17 per cent lift in Britain and Ireland as it benefited from tailwinds from the winter World Cup in Qatar. However, it was among those which saw its strong performance heavily driven by the US market.

Headline revenues grew by 46 per cent over the first quarter, with a 92 per cent jump state side as its sportsbook business soared thanks to the loosening of sports betting rules in some US states.

On Wednesday, the company is predicted to report a slight slowdown in growth due to tougher comparisons, but shareholders will eye a first profit from the fast-growing US operation led by its FanDuel platform.

Analysts at Peel Hunt have forecast that Flutter will deliver earnings of £770 million for the half-year, with around £5 million coming from the US. The update also comes as Flutter moves closer to its planned joint listing in the US by the final quarter of the year.

Entain investors will also have US opportunities on their mind as it provides its US update on Thursday. Shares in the company have lifted strongly in recent weeks amid fresh speculation that the firm could be a takeover target for MGM, its US joint venture partner.

The casino operator first bid for Entain with a £8 billion offer in 2021 which was rejected by shareholders, and ruled itself out of another move in February after renewed rumours.

The decision meant MGM could not approach Entain for another six months, and takeover chatter has sparked again as this period comes to an end.

Experts at Investec have said they think a deal is still “likely to happen”, and shareholders will keep an eye out for any signals the firm could consider a takeover deal.

BetMGM, the joint venture between the two firms, has continued to post strong growth due to the strengthening US market, while Entain saw drags from Britain and Germany at the start of the year due to regulatory pressure.

Nevertheless, Peel Hunt predicted Entain would still deliver revenues of £2.3 billion for the first half of the year, representing growth of around 11 per cent, despite potential for a slowdown in growth.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Expect to see retail growth cool, as comparable periods get tougher. But it’s growth in the higher-margin online business investors will be watching out for, as well as any signs that the consumer’s starting to feel the mounting pressures on disposable income.”