Online goes ‘from strength to strength’ to offset Entain’s retail struggles

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A strong online performance more than offset COVID related retail closures endured by Entain through 2021, with the group reporting that all “major markets” performed well during the year.

Group-wide net gaming revenue increased seven per cent to £3.83bn (2020: £3.56bn) during “another year” of disruptions which saw an increased digital uptake through H1, but a “return to more normal trading patterns” in the latter stages.

Online NGR reported a 12 per cent uptick to £3.06bn from 2020’s £2.68bn, driven by increases across an array of jurisdictions such as the UK (+10 per cent), Italy (+33 per cent), Australia (+20 per cent), Georgia (+26 per cent), and Brazil (+111 per cent). 

Germany saw sports 22 percentage points ahead while gaming was 61 per cent behind, this, saw Entain, is due to the “impact of the tolerance regime annualises and the ongoing impact of non-compliant operators continues to create an uneven market.

“However, this was ahead of expectations and, although we still await a decision on deposit limits on sports and the issuance of gaming licenses, we continue to be excited by the long-term prospects for the German market”.

Furthermore, Enlabs, purchased by Entain via a revised SEK 3.7bn (£316m) takeover bid in April 2021, is said to have “performed exceptionally well” during the year, with NGR and EBITDA ahead of initial expectations.

Online sports NGR closed at £1.44bn, a 21 per cent rise year-on-year from £1.19bn, with gaming four per cent ahead at £1.59bn (2020: £1.53bn). B2B increased 65 per cent to £26.3m (2020: 15.9m).

NGR across the gambling group’s retail division declined eight per cent to £791.1m (2020: £857.1m), due to national lockdowns and COVID restrictions continuing to affect the business through much of 2021.

Group-wide underlying operating profit closed at £484.1m, nine per cent behind 2020’s £529.5m, with underlying EBITDA ahead by five per cent at £881.7m (2020: £843.1m), which it says is a result of the revenue outperformance offset by an expected increase in losses from the group’s share of the BetMGM joint venture.

Losses at the MGM Resorts JV were £161.9m, which comes in at £101.3m higher than 2020 and is aligned to increased investment as new jurisdictions open. 

BetMGM, which is boasted as the number two US operator across sports betting and igaming with a 29 per cent market share, and leader in the latter with 29 per cent during Q421, will reach positive EBITDA in 2023, says Entain. NGR through the year increased almost five fold to $850m.

“Our full year results demonstrate yet again that Entain is a business with growth built into its business model,” stated Jette Nygaard-Andersen, CEO of Entain.

“Our strong performance is underpinned by the Entain platform which encompasses the compelling combination of our proprietary technology, our outstanding people around the world, and our industry-leading operational capabilities. 

“It is this unique platform that enables us to deliver an ever-improving customer experience, to embrace emerging consumer and technological trends, and to grow into new markets and product areas. 

“All of our major markets have performed well. In particular, BetMGM in the US has delivered a five times increase in net gaming revenue versus the previous year, and is ready to challenge for the number one position across the markets in which it operates. 

“Elsewhere, our retail business has recovered strongly and volumes have now returned to 90 per cent of pre-COVID levels as restrictions have eased and customers have returned to our shops.”  

Looking forward, the company asserts that it remains “confident in our financial performance for 2022 as well as our long-term prospects,” with retail expected to head towards pre-COVID levels and online to perform in-line with expectations against tough comparables.

“Given the quality of our people, the ongoing broad-based growth of the business, its continuing momentum, and the investments that we are making in innovation to support our future expansion, we remain confident in our financial performance for FY22 and beyond,” Nygaard-Andersen ended.