Entain Plc has upgraded its full-year 2024 forecast following better-than-expected Q2 results and revised regulatory timelines that facilitated the implementation of key updates.
In its half-year report, the FTSE100 gambling group highlighted improved operational performance ahead of Gavin Isaacs taking over as CEO on September 2, 2024.
The company’s results, including data from the BetMGM JV, showed a 6% increase in net gaming revenue (NGR) for the half-year; however, the overall NGR for the first half of the year remained flat at 0% on a constant currency pro forma basis.
In July, BetMGM JV announced its interim results, reporting an NGR of $1 billion for the first half of the year, a 6% increase compared to the same period in 2023.
The financial report for Entain, excluding US data, showed a 6% increase in the Group’s net gaming revenue to $3.20 billion (compared to $3.06 billion in the first half of 2023).
Gross profit from operations (excluding the US) was $1.96 billion (+5%), and the adjusted EBITDA for the first half of the year was $671 million, a 5% increase from $638 million in the same period of 2023. These figures reflect both the successful performance in the second quarter and a higher-than-expected profit margin during Euro trading.
The positive results allowed Entain’s management to revise its full-year EBITDA forecast to a range of $1,327 to $1,396 million.
Stella David, Interim CEO, commented: “Entain’s H1 results are clear evidence that our hard work improving the Group’s operational performance is bearing fruit. While 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.”
Financial Declines Across all UK Metrics
Segment breakdowns (excluding the US) revealed a continuing commercial slowdown in the UK and Ireland, which reported declines across all financial metrics.
In the first half of the year, reports showed that NGR in the UK and Ireland fell by 6% to $1.33 billion (H1 2023: $1.36 billion) as Entain’s brands continued to adapt to regulatory procedures regarding customers. Online NGR decreased by 5% to $586 million, while Retail NGR dropped by 5% to $686 million.
Adjusted EBITDA in the UK and Ireland was $255 million (-18%), and profit was reported at $156 million, a 28% decrease compared to the H1 2023 figure of $220 million.
The interim results were bolstered by positive performance from the International division, which recorded a 7% increase in NGR to $1.66 billion (H1 2023: $1.58 billion).
The international segment achieved a peak online NGR of $1.49 billion, driven by growth in Brazil (+28%) and the Baltic markets (+8%), offsetting weaker customer-focused performance in Italy and Australia.
Entain highlighted growth in its International division, reaching an adjusted EBITDA contribution of $385 million (+11%) along with H1 profit of $269 million.
Entain welcomes CEE unit
As noted, the H1 reports provided the first individual breakdown of Entain CEE results, with Polish and Croatian entities contributing net gaming revenue of $309 million (+126%).
The merger of the SuperSport and STS Group brands allowed Entain to announce a 61% increase in CEE adjusted EBITDA to $109 million (H1 2023: $65 million), with operating profit indexed at $97 million.
The new Entain CEE division recorded an operating loss of $13 million due to the consideration of trading operations for the period amounting to $108 million in separately disclosed items.
The FTSE group indexed separately disclosed items before tax to a total of $354 million, down from $941 million in 2023.
Disclosed items included $188 million in amortization of acquired assets, $28 million in impairment for its New Zealand business, and $65 million in non-cash write-offs related to refinancing.
Additional expenses were incurred for the cancellation of discounts on DPA settlement liabilities, restructuring, legal and onerous contracts, and the revaluation of contingent consideration, indexed as litigation costs of $8 million, resulting in a tax-adjusted loss of $60 million.
Financial restructuring and strategic execution by Entain are expected to lead to significant improvements in the H2 of the year. The company’s focus on International markets and strategic partnerships such as BetMGM is likely to drive future growth despite regulatory challenges in the UK and Ireland.
Stella David concluded: “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.”
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