Online betting to buoy Entain
LADBROKES owner Entain is set to calm investors by announcing higher revenues after a turbulent start to 2021, which included a rebuffed takeover move by casino giant MGM and the departure of its chief.
Shareholders have had their nerves tested in recent months but have found comfort in the group’s strong trading performance, with its shares highs.
The company, which also owns the Coral bookmaker brand, is expected to post higher net gaming revenues due to rapid online growth, in its full-year update on Thursday.
Entain has been among UK gambling firms buoyed by rapid growth in the US as more states give the goahead to sports betting.
In its previous update,
currently
at
near-record
it told investors that it posted a strong last quarter of 2020, boosted by a 41% jump in online net gaming revenues.
It is therefore expected to announce earnings before interest, tax, depreciation and amortisation (Ebitda) within the previously announced £825 million to £845 million range, despite the closure of betting shops.
Strong online revenues have helped UK betting firms to secure a raft of potential suitors from the US, pushing share prices higher in recent months.
At the end of 2020, rival William Hill was snapped up by casino owner Caesars in a £2.9 billion deal.
Just weeks later, fellow casino group MGM Resorts International approached Entain regarding a potential £8.1 billion takeover.
However, MGM walked away from talks last month after Entain said initial proposals undervalued the business. Takeover chatter came amid a fraught few weeks which also saw Shay Segev step down as Entain’s chief executive officer after less than six months to join sports media firm DAZN.
Shareholders will now be keen to hear from its new chief, Jette Nygaard-Andersen, over her strategy for leading the business out of the pandemic.
Susannah Streeter, senior investment and markets analyst at Bristolbased Hargreaves Lansdown, said there may be some caution around the impact of the easing of restrictions in the coming months.
“During the pandemic there has been a surge in online betting activity and fresh lockdowns are likely to have continued that trend.
“Looking ahead, the easing of restrictions could dent revenues as customers turn to other forms of entertainment, but sports events coming back to stadiums should help keep growth on track.”
41 Percentage rise in online gaming revenue in the last quarter of 2020