Entain : Ladbrokes owner Entain revenue grows 11 per cent with lockdown betting boom

Global sports-betting group Entain Plc has this morning reported net revenue growth of 11 per cent to £1.8bn, buoyed by a full sporting calendar.

In the UK Entain’s online business saw 31 per cent growth or the six-month period ending 30 June 2021, driven by a full sports fixture list and new products. Recreational betting also saw a rise.

Despite the strong results Entain shares slipped 1.6 per cent as markets opened.

Globally its online net gaming revenue rose by 28 per cent, partly supported by longer lockdown restrictions meaning purchases in stores were curbed.

Meanwhile retail net gaming revenue fell by 46 per cent – though Entain said this was offset by “encouraging” early signs as shops have re-opened.

Underlying profits fell 12 per cent to £206m, as a good result in the core business was offset by a £78m loss related to Entain’s stake in BetMGM. Underlying cash profits rose 12 per cent to £402m.

The gaming group also reported its profit after tax for operations had jumped by almost £70m to £91m.

The delayed Euro 2020 competition helped it attract customers.

“The return of sports has been a welcome relief for Entain” commented Laura Hoy, equity analyst at Hargreaves Lansdown.

“The group’s focus on digital was a beacon of light in an otherwise gloomy year,” she continued, “but without sports betting in the mix enticing players was a challenge. The group’s high street shops have suffered as the majority of its estate was shuttered for most of the half, but players were happy to shift online which helped offset covid-related weakness.”

Hoy noted other difficulties Entain faced, besides covid, with regulatory challenges in Germany, one of its markets, which weighed slightly on the company’s overall performance. While it isn’t a deal-breaker, Hoy said, “it does shine a light on some of the challenges Entain faces as it expands.”

Hoy concluded: “The group looks to be on solid footing, but as the stock is currently priced to perfection, we’ll need more evidence to be fully convinced.”

Entain CEO, Jette Nygaard-Andersen, said: “The quality and diversification of our businesses has enabled us to deliver our 22^nd consecutive quarter of double-digit online growth, while also making excellent progress on our strategic priorities.”

“In the US, BetMGM goes from strength to strength with our position as number 2 operator firmly established in the fast-growing sports-betting and iGaming market,” Nygaard-Andersen continued: “We expect to be operational in around 20 states, representing 33 per cent of the US adult population, over the next 12 months.”

The betting firm said it expects its online gaming market to be larger post pandemic. Group EBITDA was up 12 per cent for the first half of the year, at £401m. Entain said it was “confident in its prospects” for the second half of 2021 too and expected full year EBITDA to be between £850m and £900m.  

The board of Entain did not offer an interim dividend and said they only expect to recommence a dividend in March next year – assuming that lockdown restrictions continue – with the publication of its full year results.