Entain’s full year 2024 results show the operator reversed declining revenues in its core market of UK and Ireland (UK&I), returning it to growth for the first time since 2021. This was largely driven by double-digit revenue growth (13%) in Q4, as the impact of regulatory changes settled and various front and backend improvements reaped returns.
The results also showed organic growth across the group as revenue climbed 7% year-on-year to £5.16 billion (€6.1 billion/$6.6 billion) and EBITDA also increased 5% to £1.09 billion.
“Last March, I spoke very frankly about the challenges facing Entain,” interim CEO Stella David told analysts on the group’s earnings call today (6 March).
“We had to face the brutal truths … and we had to focus on delivery operationally. Today, exactly one year later, I’m pleased to report we are seeing positive results, returning to organic growth [with] both the NGR (Net Gaming Revenue) and EBITDA.”
How the UK&I performed in 2024 and throughout the year
Turning back to the UK&I, revenue growth in H2 helped offset a 7% decline in Q1 revenue. This, David said, was due to Entain’s strategic turnaround and meaningful product and marketing enhancements deployed over the last year.
Online revenue in the UK&I was 2.1% higher at £984.6 million and active customers increased 11% year-on-year. And spend per head returned to growth in Q4 across both sports and gaming, for the first time since Q1 2021.
Retail revenue, however, slipped 1.3% in 2024 to £1.07 billion. But revenue was up 2% in H2, as the group’s suite of shops benefitted from strong sports margins and the completion of its new Kascada cabinets rollout. This offset “some softness in the retail gaming market”, the group said.
Overall, UK and Ireland (UK&I) NGR for the 12-month period was up 0.2% year-on-year at £2.05 billion.
CFO Rob Wood said the return to growth was powered by the group addressing frictions and complexity within its UK customers’ journeys.
“Those drivers enabled the UK to return to market levels of growth in H2, which in turn helped all of Entain return to market growth,” he told analysts. “We’re therefore already on track to deliver our targets of market growth in 2025.”
This growth trajectory is expected to continue into H1 of this year, Wood said.
The strategic turnaround effort was first addressed last year, and has centred around improving site speeds, enhancing user experience and user interface features, a new betbuilder product, and in-game coin economies to engage players.
Entain to benefit from incoming regulations in UK
According to Wood, Entain also “lapped” the losses it had experienced from tightening regulations in the UK in 2023. But Wood said this and the wider return to growth had happened sooner than expected.
When asked whether the operator expected to absorb the impact of upcoming regulations, like the incoming online slots stakes limits set to launch in April and May, the Entain executives said these would not be a negative for them.
Instead, the group expects these measures to hit tier two and tier three operators and help the operator increase its market share in the UK.
“I think there will be some headwinds for them going forward,” David said during the earnings call.
“They do disproportionately well with those higher-value players. But going forward with the new limits, the player experience isn’t as good and there’s definitely going to be some churn in customers who want to play with better product experiences, which I think is a gentle tailwind for ourselves.”
Entain’s international performance
Outside of the UK, Entain saw international NGR up 10% on a constant currency basis. The CEE region also experienced double-digit revenue growth of 12%.
Australia remained largely flat in 2024 with NGR growth of 1%. Brazil, another core market for the company, saw revenue growth of 41%, driven by active player growth of 42%. David and Wood were bullish on Entain’s opportunity in Brazil as they said gaining an early licence, as they have, will provide early-mover advantage.
Changes in the Brazil product offering also helped it drive growth towards the end of Q4 as it introduced instant payment withdrawals.
BetMGM, its JV with MGM in the US, delivered net revenue of $2.1 billion during the year, up 7% year-on-year.
New CEO search ongoing
On the company’s search for a new CEO, following the shock departure of Gavin Isaacs in February, David said the search was underway and her focus for now was on the operational performance of the business.
“What I have said to the organisation is I’m here as long as it takes. The key thing is to make sure we have continuity in the business and we’re building on the momentum we already have. The best thing to do is make sure we have the opportunity to make the right long-term solution,” she said.
Original article: https://igamingbusiness.com/finance/entain-eyes-uki-market-share-gains-as-segment-returns-to-growth/
