Shares of Flutter Entertainment PLC (LON: FLTR) fell after the company 2020 profits tanked due to the costs of its $11 billion merger with The Stars Group, finalised in May 2020.
The company reported that its revenues rose 106% to £4.3 billion ($6 billion) compared to the £2.14 billion reported in 2019, but its net profits fell to £37.9 million ($52.6 million) compared to the £144 million recorded in 2019.
Significant impairment charges combined with depreciation and amortisation costs ate into the company’s profits driven by its mega-merger, forcing the management not to declare a dividend for the year.
WELCOME BONUS - Free Share Bundle When You Invest £50!
Get up to £500 cashback for investing with IG.
Flutter’s revenues are set to take another hit this year as the company closes its retail business, which will cost it £5 million in the UK and £4 million in Ireland each month, adding up to a £9 million hit each month.
A proposed 5.3% turnover tax on online poker and slots in Germany is set to cost the company between £15 to £20 million this year, once the tax goes into effect on July 1.
Flutter’s shares spiked high briefly after releasing its earnings results before reversing course and heading into negative territory as investors dug into the report.
It remains to be seen how the sports and gambling company’s stock will perform this year, given what lies ahead.
The gambling group operates the very successful Paddy Power, PokerStars, and Betfair UK gambling sites. It seems like it will take a while to regain its footing following last year’s merger with The Stars Group.
Flutter share price.
Flutter shares spiked 2.96% higher to trade at 14780p, rising from Monday’s closing price of 14355p but later fell into negative territory.