Analyst: Flutter CFO change non-event

May 31, 2024 11:24 AM
Photo: Shutterstock
  • Buck Wargo, CDC Gaming Reports
May 31, 2024 11:24 AM
  • Buck Wargo, CDC Gaming Reports
  • United States
  • Ireland

Jefferies Equities Research reiterated a Buy rating Friday for Flutter Entertainment after the company announced that Chief Financial Officer Paul Edgecliffe-Johnson is stepping down due to family commitments.

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Flutter pegged Rob Coldrake, the CFO of Flutter’s international business since 2020, to assume the role for the Irish gambling company that’s turning its focus to the U.S. The owner of FanDuel has its primary listing on the New York Stock Exchange.

James Wheatcroft, an analyst with Jefferies Equities Research, issued a note about the CFO transition, calling the timing difficult, but with no financial implications.

“The ‘with immediate effect’ comment in the CFO transition announcement, coupled with a lack of specific financial update or guidance reiteration, unsurprisingly spooked Flutter’s shares this morning, down 18% at one point,” Wheatcroft said.

In the note to investors, Wheatcroft said Flutter “would have been obliged” to include commentary around any material change in the numbers or guidance if that were the case. A lack of commentary, he explained, should be taken as reassurance that the numbers are at least as good as expectations.

“We see the personal situation of the outgoing CFO as separate and unrelated to the ongoing financial position at Flutter,” Wheatcroft said. “The announcement timing seems unfortunate, as it coincides with Flutter’s first full day of a primary listing in the U.S. on the NYSE, but the timing also coincides with the conclusion of both the heavy-duty transition to U.S. GAAP accounting and primary-listing process. CFO continuity is provided by an entirely appropriate internal appointment.”

Edgecliffe-Johnson was announced as CFO in October 2022 and joined during the first half of 2023 from IHG, where he was also CFO.

Coldrake previously spent 14 years at TUI Travel in a variety of financial roles, having started his career with PricewaterhouseCoopers.

Flutter stock traded at $204 on May 28, but like many sports betting stocks took, it a hit when the Illinois State Senate passed a bill over the weekend to increase taxes on online sports betting operations. The proposal, when signed by the Illinois governor as expected, will raise taxes from 20% to 40%.

Flutter stock fell to $184 on Wednesday, then opened at $188 on Friday.