Continued momentum for both its gaming and sports betting segments drove a strong H1 performance for Entain, with CEO Jette Nygaard-Andersen emphasising that the group is on track to achieve strategic targets.
Headline figures saw net gaming revenue increase 14 per cent from £2.1bn to £2.4bn, driving a 10 per cent rise in gross profit to £1.5bn (2022: £1.3bn) and 6 per cent growth in underlying EBITDA to £499m to £471m.
The group’s profit after tax did fall substantially, however, dipping from £28m to a loss of £502m year-on-year and net debt standing at £2.6bn. Despite this, the group’s segments all performed strongly, with its retail unit trading ‘ahead of expectations’ and profitability expected for BetMGM in the second half of the year.
“This has been another period of strong performance for Entain as we make clear strides towards delivering our strategic ambitions,” Nygaard-Andersen remarked.
“In particular, we are making excellent progress in broadening our customer base and deepening our audience engagement, as evidenced by the record number of active online customers on our platform.”
Segment-by-segment, gaming NGR rose 22 per cent from £753m to £918m, with the group attributing to this a continuing growth in its player base driven by ‘fresh products, engaging content and experiences’.
Meanwhile, sports betting revenue – derived from the Ladbrokes, Coral and bwin brands as well as the US-facing BetMGM joint venture with MGM Resorts – rose 6 per cent to £742m (£703m).
As mentioned above, the group’s retail operations, which chiefly consist of the Ladbrokes and Coral high-street estate, performed ‘ahead of expectations’ with NGR of 12 per cent and backing from ‘market leading’ betting terminals.
In the US, BetMGM has continued to make progress, having struggled to achieve profitability in its four years of operations. However, the brand is achieving 2023 targets, having hit positive EBITDA in Q2 which Entain expects to continue into the remainder of the year, driven by 55 per cent NGR growth to $944m ($425m).
“BetMGM continues to show momentum and backed by our technology and capabilities we are excited by the improvements we are delivering for customers in the US,” Nygaard-Andersen continued.
“I’d like to thank all my Entain colleagues around the world for their hard work and dedication in delivering this performance.”
Further commercial developments during the first of the half of the year included a raft of acquisitions which saw the company expand its reach and operational scope on a variety of fronts.
Of note, the group’s Eastern Europe-focused venture Entain CEE expanded its reach into Poland via an acquisition of local market specialist STS Holdings. Further afield, Entain secured a foothold in New Zealand via a 25 year partnership with TAB NZ.
The company has also broadened its horizons in the world of gaming and media convergence, purchasing and integrating 365Scores and Angstrom Sports to expand content and product capabilities.
On the other hand, in the face of various positive developments the company continues to be dogged by a HMRC investigation into its now divested Turkish business, which was sold back in 2017.
Entain cited that its deferred prosecution agreement (DPA) negotiations were progressing, in which the company anticipates judicial approval for the settlement during Q4 2023. The company reserved a £585m provision for a settlement with HMRC, which has contributed to the aforementioned loss of £502m.
Lastly, central to the group’s H1 2023 operations has been sustainability, with the group’s CEO stating a focus on sustainable long-term growth ‘underpins our confidence in our prospects for FY23 and beyond and delivering value for our shareholders’. The company expects EBITDA to be in the range of £1bn- £1.05bn at the close of the year.