(Alliance News) - Paddy Power owner Flutter Entertainment PLC on Monday said its full-year earnings could take a GBP110 million hit if governments and sports regulators continue to cancel events until the end of August due to the spread of Covid-19.
Shares in the company were 22% lower at 5,024.00 pence each in London on Monday morning.
Sports events with high attendances have been postponed or even cancelled in recent days and Flutter said this will "obviously have a material impact on the revenue and earnings". In 2019, 78% of its revenue came courtesy of global sporting events.
Flutter said: "In recent days, many national governments and sports authorities around the world have made the decision to postpone/cancel high attendance sports events in an effort to delay the spread of the Covid-19 virus.
"In order to assist in the quantification of the impact on the group at this point, we estimate that in a scenario where restrictions remain in place until the end of August (including full suspension of Australian sports and the cancellation of Euro 2020), Earnings before interest, tax, depreciation and amortisation for the group would be reduced by approximately GBP90 million to GBP110 million."
Flutter's estimates assume that UK and Ireland shops remain open, with horse racing fixtures in the two countries, and Australia, continue to run. Should they not, its full-year Ebitda could take a further GBP30 million hit every month.
A stacked sporting calendar has seen a spate of cancellations, with doubts over whether the European football season will continue and organisers potentially mulling postponing the Euro 2020 tournament by a year.
In the US, premier basketball, baseball and hockey leagues have been suspended.
Horse racing events continued in the UK last week, including the Cheltenham festival, which sees a spate of wagers being placed.
Flutter Chief Executive Peter Jackson said: "The challenge currently facing our business and the industry more widely is unprecedented in modern times. Our focus, first and foremost, is on protecting the welfare of our employees and our customers and we will leave nothing to chance in this regard. While our near-term profitability will be impacted by the essential measures being taken globally, the board will remain focused on protecting shareholder value and managing the business through these turbulent times."
By Eric Cunha; ericcunha@alliancenews.com
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Flutter Entertainment (FLTR)