Entain has stated that Q3 trading has been “softer than anticipated”, as the FTSE100 gambling group reaffirms its FY2023 EBITDA guidance of £1bn-to-£1.05bn.
Citing mixed results across operations, the group has laid out its action plan to “accelerate operational strategy and performance” including a comprehensive market review, simplifying group structures and operations, as well as the migration of acquired businesses onto its technology platform.
Leadership noted that online net gaming revenue had been “mixed across the group, but in aggregate, softer than anticipated”, with online NGR growth expected to be up a high single-digit per cent, but down high single-digit per cent on a proforma basis.
The group listed several factors which had an impact on the quarter’s trading, including adverse sports results impacting September’s sports margins, implementation of safer gambling measures and persisting regulatory headwinds – particularly in the UK, as well as slow progress in Australia and Italy.
Entain also highlighted “good underlying online growth” following strong proforma growth in active customers across, as well as solid returns from recent acquisitions including SuperSport in Croatia, and a robust retail performance.
US joint-venture BetMGM continues to deliver on high targets as operations are expected to produce a positive EBITDA for the second half of the year. FY23 NGR is predicted to be at the upper end of its $1.8bn to $2bn guidance following the successful rollout of single account single wallet and online sportsbook enhancements supporting the NFL season kickoff.
As a result, Entain expects FY23 group online NGR to be up a low double-digit per cent with proforma NGR down a low single-digit per cent, while also reiterating that it expects FY23 EBITDA to be between £1bn to £1.05bn.
Jette Nygaard-Andersen, CEO of Entain, commented: “We continue to see good underlying growth in our online business and are reiterating our EBITDA guidance for the year despite softer than expected revenue growth in Q3 and the ongoing roll-out of industry-leading safer gambling measures.
“We continue to attract more customers than ever before to enjoy our products and services. BetMGM remains on track to deliver positive EBITDA in H2 and a full-year NGR performance at the top end of our expectations, and we are particularly excited about the product improvements that we are rolling out over the NFL season.”
Entain has revealed a plan of action that will be implemented “to accelerate performance and delivery” in which leadership will undertake a comprehensive market review “focusing on long-term sustainable organic growth”.
Further directives will consider simplifying group structures and operations “to improve operational leverage and reduce costs”, plan the migration of acquired businesses onto its tech platform, optimise capital allocation priorities, and deliver progress on its online EBITDA margin target of 30 per cent.
Additional details on Entain’s action plan will be provided during the group’s full Q3 results on 2 November.
Nygaard-Andersen added: “We have made significant changes to the group over the last three years. Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders.
“We remain confident in our ability to deliver on the vast opportunities ahead of us, and look forward to sharing more detail about the changes that we are making alongside our Q3 trading update in November.”