Flutter Entertainment, owner of Paddy Power, has said that sports cancellations due to coronavirus could impact the company significantly.
Depending on how severe the pandemic becomes, it warns that 2020 profits could end up being between €100m and €122m (£90 million-£110 million) lower than if no virus had spread.
At the opening of trade in Dublin this morning, company shares fell by 20%.
In 2019, Flutter Entertainment announced sizeable underlying earnings. These totalled €426 million (£385 million).
According to the company, 78% of its revenue last year was driven by sports.
In a trading update, the company said that projected profit declines are based on a scenario where sporting events continue to be suspended until the end of August. This would include the cancellation of Euro 2020, plus the full suspension of Australian sports.
Peter Jackson, Flutter Entertainment Chief Executive, commented on the current situation. He acknowledged that the challenges facing both his business and the gambling industry “is unprecedented in modern times”.
Jackson continued with the below.
“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.”
Contingency in place
Flutter Entertainment mentioned in its release that contingency plans have already been implemented. Although the mass postponement of games will affect incomings, the company also noted that it had been performing above expectations.
The Group said the below.
“In terms of the operational management of our business, we successfully deployed our business continuity plan last week during what was a very busy week for the Group, with all systems performing well. Prior to the announcement of cancellations, trading in the quarter had been running ahead of our expectations, assisted by good customer momentum and favourable sporting results.”
The COVID-19 pandemic has developed at a fast pace over the past week. Although the annual Cheltenham festival went ahead, most major events have been halted. These include the Premier League, NBA, Six Nations and Champions League.