Fanduel hit by £140m pre-tax loss for six months to December 2015
DAILY fantasy sports business FanDuel, which was recently forced to restructure its ownership model in favour of its private equity backers, has finally filed overdue accounts for the six months to the end of 2015, revealing that it made a loss during the period.
FanDuel notes in the 2015 accounts, gross profit for the period totalled $49.8 million (£37.4 million) which was swamped by administrative expenses of $336.3 million (£252.9 million) and operating losses widened to $286.4 million (£215.3 million), up from $77.7 million (£58.4 million) for the previous 18-month financial period.
Fanduel notes for the 2016 year and to the date of 2015 accounts sign off on 29 September of this year, it has continued to incur losses though “on a smaller scale than 2015”.
The company notes the losses booked in 2015 had also “exceeded those forecast in its operating plan” and actions were taken in the 2016 year to reduce operating costs, including 60 job cuts and “curtailment of discretionary expenditures”.
The company notes in the 2015 accounts it funded losses in the 2016 year from a $20 million financing arrangement and from issuing new convertible loan notes valued at $62.5 million.
However Fanduel warns further financing will be required to “successfully implement its operating plans”, which will incur further losses.
Earlier in the year Fanduel and its main rival DraftKings were forced to abandon a merger plan after the US Federal Trade Commission secured a court order effectively blocking the merger believing it would create a “near-monopoly” in the market for prize-led daily fantasy sports (DFS) contests.