Capital Allocation Committee verdicts Entain ‘well-positioned’ for growth

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Entain has announced that the Capital Allocation Committee has concluded the strategic review of its operating structures, global portfolio of brands and funding.

The Committee was appointed in January by the FTSE gambling group’s board to undertake its review to maximise shareholder value and reflect the operational progress of the business, which declared outstanding losses of close to £900m in 2023

The strategic review concluded that “Entain has the appropriate portfolio of diversified strategic assets, brands, capabilities, and geographic footprint to ensure it is well positioned to deliver high-quality long-term growth”.

Entain’s board is recommended to continue making North American expansion a priority since it carries a ‘significant upside’ with organic growth and expanding operating margins. 

Maintaining a ‘robust financial position’, Entain’s balance sheet has been strengthened and improved following recent refinancing and term loan adjustments of $ and € debt equivalent to £600m. The review of Entain’s global portfolio saw the Committee deem Crystalbet in Georgia as non-core; strategic alternatives, including potential sale, are being considered.

On key recommendations, Barry Gibson, outgoing Chair of Entain, responded: “I am delighted that the Capital Allocation Committee has concluded its strategic review of our portfolio. 

“Whilst we still have more work to do to improve our operational performance, the Board is pleased with the progress Entain is making so far in 2024 in line with our strategy. The Group has the core strengths, brands, and products to be competitive across its markets and continues to be a global leader in betting and gaming.”

As part of its review, the Committee considered key market developments and operational progress.

In Brazil, the CAC noted that the operator is “returning to strong double-digit revenue growth during Q2” with actions taken to improve customer acquisition and retention accelerating our performance. 

Meanwhile, in the UK, the committee stated that new regulatory measures and an enhanced customer offer have expectations to bring its core brand in the region back to growth. 

Elsewhere, BetMGM’s product roadmap in North America advancing well, with recently launched MLB and NBA sports betting markets leveraging Angstrom’s capabilities.

In addition, the Nevada Gaming Commission approved Entain’s applications and “certain of its subsidiaries without limitation”.

Project Romer is on track to hitting cost savings expectations via operational simplification of the FTSE global operating structure. 

The CAC concluded that it will “continue to regularly review strategic progress and consider options to maximise shareholder value, including ongoing oversight of all significant aspects of capital commitments”.