Bookie bounce back for Ladbrokes owner Entain drives industry confidence
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The horse may not have bolted for high-street bookies, with Ladbrokes owner Entain stating that figures had returned to 90 per cent of pre-pandemic levels.
Whilst chief exec Jette Nygaard-Andersen said it was “too early to say” whether online consumer habits would stick in the long-term, he did say that Entain would continue to invest in its bricks-and-mortar estate.
It comes as the London-listed gambling giant reported a stellar set of results yesterday, with group revenue up nine per cent to £3.8bn and post-tax soaring 142 per cent to £275.6m.
Like its competitor Flutter Entertainment, which owns the likes of Betfair and FanDuel, the overall performance of Entain was buffered by its expansion across the pond.
Indeed, BetMGM – the group’s joint venture in the US – has seen revenues rise five-fold to $850m (£638m) for the full year.
“All of our major markets have performed well. In particular, BetMGM in the US has delivered a five-times increase in net gaming revenue versus the previous year, and is ready to challenge for the number one position across the markets in which it operates”, Nygaard-Andersen commented.
Investment bank Peel Hunt maintained its buy status towards the company, and praised its ambitions for acquisitions moving forward.
Off the back of this success, Entain also said that it plans to pay back the £44m it claimed in government support last year to keep 14,000 staff on furlough whilst betting shops were closed.
The group had initially resisted calls to pay back the money, with some suggesting that it had actually benefited from the online pandemic betting boom. However, the group did not comment on whether it would be paying back 2020 claims.
Bottom line
Entain’s strong set of results and cheery outlook only made Flutter’s pessimism and nosedive earlier this week on the market feel even worse.
Citing a spell of punter-friendly wins as the reason behind its losses, the Betfair owner failed to rally investor momentum around its US dominance with FanDuel and Super Bowl success.
Indeed, huge losses from the likes of Tyson Fury’s knock out fight last October as well as goals scored by Premier League favourites meant that Flutter’s monthly player growth was largely overshadowed.
Chief exec Peter Jackson suggesting that betting was likely to “remain flat” in the coming year also didn’t help when comparing to Entain’s more upbeat outlook.
As AJ Bell investment analyst Russ Mould said: “The contrast in the reception given to the results from Entain and those from Flutter could hardly be greater.”
Speaking with City A.M., Mould said that whilst both companies continue to beat expectations across the Atlantic, he commented: “Entain has a more diversified revenue base than Flutter, with lesser exposure to the UK, so there is less of a threat posed by the review of the 2005 Gambling Act and the prospect of tighter regulation of wagering