Entain plc reports a rise in overall NGR to ￡2.4 billion
Entain’s H1 2023 financials reveal an 11 percent rise in overall NGR to ￡2.4 billion, with online revenue up 12 percent to ￡1.7 billion due to a 19 percent increase in online gaming revenue and 3 percent growth in online sports betting revenue. Retail revenue also surged 11 percent to ￡709.3 million.
Online active customers reached a record high
Excluding BetMGM, the US joint venture, BetMGM reported H1 NGR of US $944 million, up 55 percent. Underlying EBITDA rose 6 percent to ￡499.4 million, while online EBITDA grew 8 percent to ￡416 million. Geographically, Italy led with 12 percent YoY online revenue growth, with Georgia (7 percent) and Baltics Nordics (7 percent) following. Key markets like the UK, Australia, Brazil, and Germany saw declines, attributed to deposit limits and regulatory issues. Online active customers reached a record high, up 23 percent, driven by product diversification.
Entain’s H1 2023 results: Net Gaming revenue year-on-year from 2019 to 2023 (Source:SiGMA)
Settlement with Crown Prosecution Services
In a significant development, Entain anticipates a ￡585 million settlement in its ongoing negotiations with the Crown Prosecution Service related to alleged offenses under the Bribery Act. Chairman Barry Gibson highlighted transformative changes in strategy, management, and culture. Entain’s 2023 outlook forecasts an EBITDA between ￡1 billion and ￡1.05 billion.
Entertain plc reported an 11 percent rise in overall NGR to ￡2.4 billion.
The H1 Group performance exhibited robust results, highlighted by an all-time high in Online active customers and successful strategic execution. The Total Group’s Net Gaming Revenue (NGR) surged by 19 percentand Group NGR (excluding US) increased by 14 percent with a 3 percent rise on a proforma basis. Online NGR saw a 15 percent climb rising by 1 percent on a proforma basis after factoring out regulatory effects. Impressively, Online NGR excluding regulatory impacts escalated by 6 percent on a proforma basis. The Group demonstrated its strategic focus by achieving a record number of online active customers, showcasing a remarkable 23 percent YoY growth emphasizing the expansion of their customer base.
Retail surpassed expectations with NGR rising by 12 percent supported by a strong offering in betting and gaming terminals. BetMGM also stood out, posting a strong performance with H1 NGR of $944 million, up by an impressive 55 percent YoY. Furthermore, the company’s positive EBITDA in Q2 and its trajectory towards the upper end of FY23 NGR guidance of $1.8-$2.0 billion, along with an expected EBITDA positive status in H2 2023, further solidifies the company’s positive outlook.
Italy and Georgia reported growth
Geographically Italy led with 12 percent YoY for online revenue growth with Georgia up 7 percent and Baltics Nordics up by 7 percent too.? Key markets such as the UK, Australia, Brazil and German reported a decline in revenues, attributed to deposit limits and regulator issues.? Online active customers reached a record level up by 23 percent driven by product diversification.
Entain H1 2023 Gross Profit year on year from 2020 to 2023 (Source – SiGMA)
Key transactions during H1 2023
Entain has revealed four key transactions: an expansion into Poland’s market through the acquisition of STS Holdings, aiming to tap into growth opportunities in the CEE region, a 25-year partnership with TAB NZ, facilitating access to the New Zealand sports betting sector; acquisitions of 365Scores and Angstrom Sports to enhance content and product offerings and progress in negotiations with DPA, potentially leading to the resolution of the HMRC investigation into its previous Turkish business.
As a result, Entain is setting aside ￡585 million to cover a potential settlement payable over four years. These moves highlight Entain’s strategic drive to expand its presence diversify and diversify its offerings.
CEO’s statement
Jette Nygaard-Andersen, CEO of Entain, (pictured above),?remarked on the company’s strong performance and focus on strategic goals. Efforts to expand the customer base and enhance audience engagement are evident through the record number of active online customers.
BetMGM’s momentum remains strong, supported by technological prowess, promising improvements for US customers. Nygaard-Andersen expressed gratitude to Entain colleagues globally for their dedication to the company’s achievement. The focus on sustainable long-term growth, coupled with global operational strength, gives confidence in FY23 prospects and beyond, aiming to deliver shareholder value.
Financial Sustainability
Entain has reported notable financial achievements, with Group EBITDA reaching ￡499 million, marking an increase of 6 percent from the previous year. The Group’s underlying profit before tax from continuing operations stands at ￡287.6 million, while a loss after tax from continuing operations amounts to ￡502.5 million. The proposed interim dividend of 8.9p per share demonstrates a year-on-year growth of 5 percent.
The successful placement of 48.8 million new shares has secured ￡600 million to facilitate the acquisition of STS Holdings and other strategic investments. Additionally, the issuance of ￡500 million Term Loans enabled the redemption of Ladbrokes Bonds due in September 2023. Notably, Entain maintains its commitment to sustainability, with 100 percent of the company’s revenue from regulated markets and expanding its protective technology. The company’s partnerships and support for various charitable initiatives showcase its dedication to responsible practices.
Currently, Entain Plc (ENT.L) trades at GBp1,312.50 (-4.8 percent).
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