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Entain Reports Strong H1 Performance

Entain Reports Strong H1 Performance
by
August 10, 2023
in Finance News, iGaming News
239

The first half of 2023 has marked a remarkable performance for Entain, primarily fueled by positive developments in the gaming and sports betting sectors. CEO Jette Nygaard-Andersen emphasizes that the company remains on track to achieve its strategic objectives.

Overview of Results

Entain’s net gaming revenue surged by 14 percent, soaring from £2.1 billion to an impressive £2.4 billion. This impressive growth translated into a 10 percent increase in gross profit, amounting to £1.5 billion (compared to £1.3 billion in 2022). Furthermore, there was a substantial 6 percent growth in adjusted EBITDA, reaching £499 million compared to the previous year’s £471 million.

Despite the group’s post-tax profits plummeting from £28 million to a loss of £502 million and the net debt standing at £2.6 billion, all segments of the company exhibited strong performance. Particularly noteworthy was the retail unit’s performance, surpassing expectations. Moreover, BetMGM is anticipated to become profitable in the second half of the year.

Progress and Achievements of Entain

Nygaard-Andersen underlines that Entain continues to experience a period of robust performance and is making strides in achieving its strategic goals. The expansion of the customer base and enhanced audience engagement stand out as significant achievements, evident in the record number of active online customers on the platform.

In the gaming sector, net gaming revenue surged by an astonishing 22 percent, surging from £753 million to an impressive £918 million. This growth is attributed to the continuous expansion of the player base, driven by the introduction of new products, engaging content, and captivating gaming experiences.

Within the sports betting domain, revenues climbed by 6 percent to reach £742 million (in comparison to £703 million). This surge was driven by prominent brands such as Ladbrokes, Coral, bwin, and the US-based BetMGM joint venture with MGM Resorts.

The retail units, notably Ladbrokes and Coral, also exceeded expectations with a 12 percent growth in net gaming revenue. This accomplishment was facilitated by leading betting terminals.

BetMGM’s Triumphs in the US

BetMGM overcame initial hurdles in its four years of operation in the US to achieve significant progress. The brand has now reached its 2023 goals, posting positive EBITDA in the second quarter. This favorable trend is expected to continue for the remainder of the year. The staggering 55 percent growth in net gaming revenue to $944 million (compared to $425 million) significantly contributed to this achievement.

Nygaard-Andersen underscores BetMGM’s momentum and highlights that the company’s technological prowess plays a pivotal role in delivering enhancements to US customers.

Further Developments and Sustainability

The first half of the year witnessed Entain making several acquisitions that expanded the company’s reach and operational scope. Notably, Entain CEE’s expansion into Eastern Europe was underscored by the acquisition of local market specialist STS Holdings in Poland. Moreover, Entain solidified its presence in New Zealand through a 25-year partnership with TAB NZ.

The company also extended its focus to the convergence of gaming and media by acquiring and integrating 365Scores and Angstrom Sports. These endeavors aimed to amplify content and product capabilities.

Challenges and Sustainability

Despite the positive developments, Entain continues to grapple with an HMRC investigation related to its previously divested Turkish business, which was sold in 2017. The company has revealed that negotiations for a deferred prosecution agreement (DPA) are ongoing and anticipates judicial approval for settlement in Q4 2023. A provision of £585 million has been set aside for the HMRC settlement, contributing to the aforementioned £502 million loss.

In conclusion, Entain’s CEO emphasizes the company’s commitment to sustainability. A focus on sustainable, long-term growth instills confidence in the prospects for the current fiscal year and beyond. The company projects an EBITDA ranging from £1 billion to £1.05 billion at the close of the year.

Frequently Asked Questions

What results did Entain achieve in the first half of 2023?

Entain demonstrated robust performance in the gaming and sports betting domains, with rising net gaming revenues, increased gross profit, and growth in adjusted EBITDA.

What successes were achieved by BetMGM in the US?

Despite initial profitability challenges, BetMGM met its 2023 goals, achieving positive EBITDA and impressive growth in net gaming revenue.

What acquisitions did Entain make in the first half of the year?

Entain expanded its presence in Eastern Europe through the acquisition of STS Holdings and secured a partnership with TAB NZ in New Zealand.

What challenges does Entain face?

An ongoing HMRC investigation concerning a previous Turkish business divestment poses a challenge.

What is Entain’s long-term goal?

Entain aims for sustainable, long-term growth and anticipates an EBITDA ranging from £1 billion to £1.05 billion at year-end.

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