DAVY VIEW

While bolt-on in nature (likely to add a low- to mid-single-digit percentage to group EBITDA), Flutter’s acquisition of Tombola is strategically interesting for several reasons. Firstly, it strengthens Flutter’s position at the extreme recreational end of the UK gaming market (Tombola’s average revenue per active player is almost 40% lower than Flutter’s current UK&I Online division) and brings additional safer gambling expertise to the group. Secondly, it enhances the group’s exposure to still attractively growing segments of the UK market (Tombola has generated 25% revenue CAGR growth over the past five years). Tombola’s growth trajectory should only be enhanced as it benefits from Flutter’s broader expertise (digital market in particular). Finally, it is consistent with Flutter’s strategy in core markets. It allows the group to maximise profitable growth in the critical UK market, which will remain a primary source of profits and cash. That capital can then be deployed into other exciting global growth opportunities.