Entain’s interim CEO and Chair Designate Stella David has stated that the company’s half-year 2024 results are “clear evidence” that its efforts to improve its operational performance are working.
Following the performance in the first half of 2024, the company has updated its net gaming revenue guidance, as it now expects FY24 NGR growth on a proforma basis to be low single-digit positive, with group EBITDA expected to be between £1.04bn and £1.09bn.
This comes as Entain prepares for the arrival of its new CEO, Gavin Isaacs, who begins his new role on 2 September, with interim CEO David replacing the retiring Barry Gibson as Chair on 30 September.
H1 YoY revenue increase
Entain noted that the H1 results “reflect underlying Q2 outperformance and stronger than expected win margins for Euros”. NGR for the period came in at £2.56bn, up 6% year-over-year (H1 2023: £2.4bn), 8% in constant currency and 0% in constant currency on a proforma basis.
This figure includes Entain’s 50% share of BetMGM, the company’s joint venture in the US market alongside MGM Resorts International.
Revenue improved by 6% YoY and 8% in constant currency to £2.52bn (2023: £2.38bn).
Excluding US, total group NGR rose by 6% YoY, 8% in constant currency and 0% in constant currency on a proforma basis.
Entain noted that its performance in H1 was “delivered by focused execution driving improving underlying growth” across the business, “as well as benefiting from stronger than expected margins in the UEFA Euros tournament”.
Online NGR improved by 9% YoY, 11% in constant currency and 1% in constant currency on a proforma basis, while active customers rose by 13% proforma.
The company stated that the growth reflected “improving operational performance, stronger than expected Q2 sports margins, as well as the benefit from last year’s acquisition of STS” and its partnership with TAB NZ.
”Entain’s H1 results are clear evidence that our hard work improving the Group’s operational performance is bearing fruit.”
Entain interim CEO and Chair Designate Stella David
Retail NGR grew by 1% YoY but fell by 4% in constant currency on a proforma basis.
Entain’s gross profit rose by 5% YoY to £1.53bn (2023: £1.46bn), while its contribution grew by 6% to £1.19bn (2023: £1.13bn) and its operating costs declined by 7% to minus £670.4m (2023: minus £626.8m).
Group underlying EBITDA improved by 5% YoY to £523.8m (2023: £499.4m) while underlying operating profit fell by 6% to £287.9m (2023: £307.4m). Online EBITDA rose by 9% to £445m, while retail EBITDA fell by 11% to £140m.
Group loss after tax was £47m, while as of 30 June, net debt stands at £3.33bn with available cash of around £1.3bn. Entain added that the Project Romer efficiency programme is “progressing well, increasing annual net savings target to £100m in 2026”.
David commented: ”Entain’s H1 results are clear evidence that our hard work improving the Group’s operational performance is bearing fruit.
“Whilst there is more work to do, we are pleased with the progress so far and look forward to building further on these solid foundations in H2 and beyond.”
UK ‘in line with expectations’ despite NGR drop
Taking a look at performance per regional segment, International and CEE operations underwent growth in H1 in comparison to the same period the previous year, but UK & Ireland operations continue to undergo declines.
However, Entain noted that the UK & Ireland segment is still performing “in line with expectations”, despite NGR being down 6% YoY and in constant currency proforma.
UK&I online NGR is down 8% in constant currency due to “comparative regulatory headwinds, partially offset by improving player KPIs driven by product and offering enhancements” including greater player journey simplification. Actives were up by “12% YoY and year-to-date stabilisation in spend per head”.
UK&I retail NGR is down 4% YoY in constant currency, which Entain says is “in line with expectations”, ahead of its next-generation gaming cabinet rollout which will be completed in Q3.
International growth
Looking at its International segment, NGR was up 10% YoY in constant currency and 3% in constant currency on a proforma basis, with Brazil delivering a “strong double-digit revenue growth ahead of schedule”.
Brazil’s NGR was up by 28% YoY in constant currency, while Australia remained flat YoY “despite softness in underlying market”. In Italy, NGR fell by 3% in constant currency (online down 3%, retail down 4% – both in constant currency) following “customer-friendly Q1 sports margins offsetting volume growth”.
Entain noted that its CEE segment (Croatia and Poland) “continued to perform well” as NGR was up 12% YoY in constant currency proforma with SuperSport operations in Croatia rising by 17% in constant currency.
For BetMGM, who published a trading update last month, Entain noted that operations have “delivered accelerating net revenue momentum through H1 and stabilising 13% market share”.
BetMGM’s Q2 NGR was up 9% YoY in constant currency and 4% on Q1, “driven by strong acquisition and retention metrics with improving app and product capabilities and successful engagement campaigns”.
The company also stated that BetMGM had “encouraging results from Angstrom-powered MLB and NBA offerings; expansion into NFL offering expected ahead of 2024 season” and that it will be “reinforcing igaming strength with expected marketing investment in H2”.
FY24 guidance update
Entain has also updated its guidance for FY24, as it expects “low single-digit positive proforma growth in Online NGR (from low single-digit negative)” while group EBITDA is expected to be in the range of £1.04bn and £1.09bn.
The company noted that the guidance change reflects “uplift from stronger than expected Q2 NGR performance, revised timing of regulatory implementation in Brazil and the Netherlands, offset by FX headwinds”.
The guidance change comes as Entain prepares to reshuffle its leadership team, with Gavin Isaacs joining the company as CEO on 2 September and Stella David becoming Chair on 30 September, replacing Barry Gibson who is retiring.
David stated: “Our focused execution underpins the Group’s performance so far this year, and we are excited by the opportunities ahead.
“I look forward to welcoming Gavin Isaacs as our new Chief Executive Officer and supporting him as we continue to build on the Group’s improving operational momentum.”