Ladbrokes owner Entain to announce higher revenues
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 currently at near-record 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 March 4.
Entain has been among UK gambling firms buoyed by rapid growth in the US as more states give the go-ahead to sports betting.
In its previous update, it told investors that it posted a strong last quarter of 2020, boosted by a 41 per centjump in online net gaming revenues.
It is therefore expected to announce earnings before interest, tax, depreciation and amortisation (Ebitda) within the previously announced £825m to £845m 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 £2.9bn deal.
Just weeks later, fellow casino group MGM Resorts International approached Entain regarding a potential £8.1bn 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 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.”