By Padraic Halpin
DUBLIN, Nov 4 (Reuters) - Online gaming giant Flutter will pause its share buyback programme to prioritise organic investment, deleveraging and cost-savings, its new CEO said on Wednesday, after the company reduced its profit forecast for a fifth successive quarter.
Flutter, the world's largest online gaming company, has been forced to lower its profit expectations as higher regulatory costs, increased competition and strategy missteps slowed previously booming US growth.
Dan Taylor,
who took charge in October, said his four immediate priorities would be to build on the company's US leadership position, capture opportunities in the nascent prediction market sector, increase value from its non-US portfolio and simplify the company's operating model.
Flutter shares were 1.9% lower in pre-market trading in New York.
"Delivering against those priorities will require faster execution, tough decisions and disciplined investment," Taylor said in a statement.
CONFIDENT OF REDUCING DEBT
He told Reuters he was confident of deleveraging the company's balance sheet over the next 12 to 18 months towards its target leverage range of 2 to 2.5 times earnings.
The company's leverage ratio has risen to 4.6 times earnings from 2.2 eighteen months ago before acquisitions in the US, Italy and Brazil.
Flutter, whose brands include FanDuel and Paddy Power, also has a plan announced in August to save $500 million by 2029.
Just over two years ago, when Flutter promised up to $5 billion to shareholders it had expected the US betting boom to more than double its core profit to $5 billion by 2027.
By the end of June, the buyback had returned $1.37 billion to shareholders.
Flutter on Wednesday forecast a 7% fall in full-year core profit to $2.5 billion from the $2.66 billion flagged in August and $2.59 billion expected by analysts. The latest cut was due to adverse sports results and a sports betting ban in Brazil.
A 25% fall in third-quarter core earnings before interest, tax, depreciation and amortisation to $360 million compared to the $399 million average of analysts polled by LSEG SmartEstimate. Taylor said, however, that the underlying performance in the US was ahead of expectations.
(Reporting by Padraic Halpin; editing by Yoruk Bahceli and Barbara Lewis)
