NGR at Entain in H1 hit £2.56bn (€2.97bn/$3.25bn). This is excluding US operations from its 50% stake in BetMGM, the joint venture it shares with MGM Resorts International.
Of this total, £1.79bn came from online, an increase of 9% from the previous year. Entain also reported a slight rise in retail revenue – drawn from operations in the UK, Italy, Belgium, Croatia, New Zealand and Ireland – with this edging up 1% to £735.6m.
“Entain’s H1 results are clear evidence that our hard work improving the group’s operational performance is bearing fruit,” said interim CEO Stella David.
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Brazil accelerates as regulated market nears
Regulatory changes hit Entain UK & Ireland NGR
Starting with the UK & Ireland, NGR slipped 6% to £1.00bn. Gaming NGR dropped 7% to £611.2m, while sports betting was also down 5% to £393.5m, on the back of a 10% drop in wagers.
Entain said the decline reflect the previous year’s regulatory changes in the UK following the Gambling Act review. This was particularly true for online activities in the region, with revenue down 8%. Last year the operator said it expected an impact of less than 1% of group NGR in 2024.
However, the group maintains that it is confident of achieving online NGR growth by the end of the year following improvements to sportsbook user experience and its new management team.
For retail revenue was 3% lower. Entain said this was in line with expectations and reflects the timing of a cabinet refresh cycle in its shops. This is set to complete during Q3.
CEE venture paying off as revenue jumps 126% in H1
Moving onto mainland Europe and Entain’s CEE joint venture with Czech investors Emma Capital made a positive contribution as it grows through M&A. Revenue in H1 hit £240.9m, which is some 126% higher than in the previous year – helped by the acquisitions of STS in Poland and Croatia’s SuperSport during 2023.
Sports betting is Entain’s core focus in CEE, with revenue up 213% to £181.5m, while gaming revenue also climbed 22%. Online revenue increased 130% and retail 107%.
Breaking this down by country, in Croatia with Supersport, Entain noted the impact of its new live score app and stat centre. It also rolled out new self-service betting terminals (SSBTs) and launched a SuperSpin reward tool.
As for Poland, Entain said that it was pleased with the progress of STS, given the increasing competition in the country.
Brazil stands out for Entain’s international business
As for the international business, NGR increased 7% to £1.29bn, with growth across sports betting and gaming. Entain also noted that revenue was higher within both its online and retail operations.
The group reported a strong underlying performance in all key market, with the exception of Italy. Here, NGR declined as customer friendly results were only partially offset by growth across online and retail. Entain also saw revenue fall in New Zealand – where it works with Tab NZ through a long-term agreement – and the Netherlands.
With Brazil moving towards launching its regulated market, Entain’s business in the country is accelerating. Following improvements in both customer acquisition and retention, as well as an increase in volumes of deposits and withdrawals, NGR rose 28% year-on-year. Elsewhere, Baltics and Nordics NGR climbed year-on-year, while Australia was level. Georgia, where the operator is looking to divest its Crystalbet business, grew revenue in H1.
What about BetMGM in H1?
Entain does not report revenue from its share in BetMGM as part of its results. However, it did noted that BetMGM saw “accelerated” net revenue momentum in H1, with its market share at 13%.
BetMGM reported its results separately last week. This revealed NGR of $1bn, with management saying this was underpinned by Angstrom’s product capabilities and leveraging omnichannel opportunities through MGM.
“We are encouraged to see our investment in BetMGM’s product offering and customer experience delivering accelerating momentum, which gives us confidence in improving year-over-year revenue growth during H2 of 2024 and into 2025,” Entain said.
“BetMGM has a pipeline of exciting opportunities ahead, reinforcing our conviction in BetMGM’s strong future.”
Entain posts net loss, but Turkish settlement skews prior year figures
Looking towards the bottom line for Entain, cost of sales for the first half were higher. This left an operating profit of £120.7m, a stark improvement on last year’s £377.9m loss. This was down to the £585m provision set aside for the settlement with His Majesty’s Revenue and Customs over its historical Turkish operations.
Entain’s share in joint ventures and associates such as BetMGM and Entain CEE generated a £57.3m loss, pushing operating profit down to £63.4m.
After non-operating expenses, pre-tax loss stood at £27.6m, again an improvement on last year’s £448.1m loss. Entain paid £19.3m in tax, leaving a net loss of £46.9m, compared to £506.2m last year, while group EBITDA also improved by 5% to £524.0m.
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“Whilst there is more work to do, we are pleased with the progress so far and look forward to building further on these solid foundations in H2 and beyond,” interim CEO David commented.
Entain has upgraded full-year guidance. It now expects online NGR growth on a pro-forma basis to be low single-digit positive. In addition, EBITDA will fall in a range between £1.04bn and £1.09bn, it said.
“Our focused execution underpins the group’s performance so far this year, and we are excited by the opportunities ahead,” David added.
Isaacs waiting in the wings for Entain
David also took the opportunity to welcome Gavin Isaacs as the new CEO of Entain. Isaacs was appointed last month and will take the wheel at the start of September.
Isaacs joins Entain having held a series of leadership roles in the industry. These include a spell as president and CEO of Scientific Games, board member at DraftKings and chair of SBTech.
David has been serving as interim CEO at Entain since the exit of Jette Nygaard-Andersen late last year. She will succeed the outgoing Barry Gibson as chair at the end of September.
“I look forward to welcoming Gavin Isaacs as our new CEO and supporting him as we continue to build on the group’s improving operational momentum,” she said.
The markets have responded positively to Entain’s results. Its shares are trading up 8.9% at 570.00 pence per share in London this morning.
Original article: https://igamingbusiness.com/finance/half-year-results/entain-h1-2024/
