Sky Bet, owned by Flutter Entertainment, has reported a drop in profit due to increased operating expenses.
- The company faced a £44 million rise in expenses, reaching £310.2 million this year.
- High inflation and rising salary costs are key factors behind the financial impact.
- Despite the profit decrease, Sky Bet’s revenue experienced growth from £469.7m to £495.4m.
- No dividends were distributed this year, contrasting with a £107.2m payout in 2022.
Sky Bet, under the umbrella of Flutter Entertainment, has encountered a downturn in its financial gains for the year 2023. The betting giant reported a pre-tax profit of £48.9 million, significantly affected by a substantial increase in operating expenses, which escalated by £44 million to a total of £310.2 million. This rise in costs is attributed to persistent high inflation and increased salary expenses.
While the profit margins saw a squeeze, Sky Bet’s overall revenue displayed a positive trend, climbing from £469.7 million to £495.4 million during the same period. This indicates a resilience in its income-generating capabilities despite prevailing economic challenges.
Interestingly, the company opted not to distribute any dividends this year. This is a stark shift from the previous financial year when a hefty £107.2 million was allocated for dividend payouts.
Sky Bet has been a part of Flutter Entertainment since 2020, following the acquisition of The Stars Group by Flutter for £3.4 billion. Prior to this acquisition, Sky Bet was predominantly owned by CVC Capital Partners, who held an 80% stake post a £600 million deal in 2015.
On the broader scale, Flutter Entertainment has been adjusting its forecasts upwards following robust performance in the US market. The company anticipates a 20% year-on-year growth in group revenue, complemented by a 34% surge in adjusted EBITDA by the end of 2024. This optimism is fuelled by a remarkable 20% increase in group revenue to $3.6 billion (£2.8 billion) in the quarter ending 30 June 2024, propelled by strong market performances.
The US sector notably contributed to this growth, recording a 39% revenue increase, raising income from $1 billion (£779 million) to $1.5 billion (£1.2 billion). Meanwhile, revenues from the UK and Ireland markets grew by 17% to reach $928 million (£723 million).
These developments in Sky Bet follow the favourable financial outcomes reported by Tombola, another subsidiary of Flutter, which achieved substantial revenues and profits for the year 2023, further highlighting the diversified success within Flutter Entertainment’s portfolio.
Sky Bet’s experience underscores the challenges of rising costs even amid revenue growth.
