Entain reported a 14% year-on-year increase in net gambling revenue (NGR) to £2.40 billion during the first half, helped by a record number of active online gamers in the second quarter.
The group reported growth across all business areas in the six months to June 30. Online and retail revenue, excluding US operations, increased year-over-year at Entain.
By including $944 million in revenue contributions from its BetMGM joint venture with MGM Resorts, NGR increased by 19%. That business, added Entain, BetMGM posted its first positive EBITDA numbers in the second quarter.
Higher revenue also meant an increase in pre-tax profit for Entain.
However, its final result was £585m earmarked as part of the Deferred Process Agreement (DPA) negotiations with the UK’s Crown Prosecution Service (CPS) over historic activities in Turkey.
Entain takes ‘clear steps’ towards strategic goals
CEO Jette Nygaard-Andersen was pleased with the first half. She said the operator has taken “clear paths” to achieve strategic goals and remains confident in future growth prospects.
“In particular, we are making excellent progress in broadening our customer base and deepening our audience engagement, as evidenced by the record number of active online customers on our platform,” he said.
“BetMGM continues to show momentum and, supported by our technology and resources, we are excited about the improvements we are delivering to US customers.
This clear focus on driving long-term sustainable growth, combined with our global operating capabilities, underpins our confidence in our outlook for fiscal 23 and beyond and adds value to our shareholders,” he added.
Online revenue rises despite drop in sports betting
Looking at Entain’s first half performance, online businesses led the way with 145% more than $1.47 billion in the same period last year.
Entain said the acquisitions’ strong underlying and NGR trading more than offset regulatory headwinds. This occurred mainly in the United Kingdom and Germany. The group also highlighted the success of its focus on recreational customers.
Highlights include a 2% drop in UK NGR, although Entain said without regulatory changes, this would have been 7% higher.
NGR also dropped in Australia, Germany and Brazil. However, there was growth in Italy and Georgia, as well as in the Baltic-Nordic and CEE regions.
Sports NGR rose by 6% to £742.2m despite a 3% drop in online betting to £6.68bn. Gaming NGR in this segment rose by 19% to £918.3m, while B2B NGR jumped 52% to £23.8m
Acquisitions
Coming back to Entain’s acquisitions and face change, the deal has completed a number of key deals in recent months.
This includes Sportsflare, which was acquired in June, while Entain CEE, a joint venture with Czech investment fund Emma Capital division, has also agreed to acquire Poland’s STS.
Elsewhere, Entain has an agreement to buy Angstrom Sports with another new addition to the Entain family being Dutch side BetCity, which has accommodated its re-entry into the country’s market following regulation.
Profit before tax rises 88.7% at Entain
Entain did not publish a full breakdown of costs for the half but did reveal that gross profit was up 10% to £1.46bn.
Contribution – earnings remaining after all direct costs have been subtracted from revenue – also increased by 10% to £1.13bn.
Underlying EBITDA rose 6% to £499.4m, while after including share-based payments, underlying depreciation and amortization and a portion of the joint venture loss, underlying operating profit jumped 25% to £307.4m.
Entain was also responsible for £19.8m in net finance costs. As such, pre-tax profit before separately disclosed items reached £287.6m, an increase of 88.7% on the previous year.
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