SBC News Entain H1 progress tainted by £580m Turkish legal provision  

Entain H1 progress tainted by £580m Turkish legal provision  

Entain Plc stands by its growth strategy and long-term financial prospects, following a transformative H1 trading period in which the FTSE gambling group acquired four new businesses to its global portfolio.

 Publishing its 2023 Interim trading results, Entain registered a net group revenue (NGR) of £2.4bn, up 14% on H1 2022 results of £2.1bn.

Generating a period NGR of £1.65bn (+14%), Entain hailed the performance and growth of its online unit “across regulated markets” and underpinned by a record 23% YoY increase in online active customers. 

Reported under period highlights, Entain underscored its position as the “only global operator with 100% of revenue from regulated-or-regulating markets, having accelerated exit of markets with no clear path to domestic regulation”.

Online growth was maintained despite ongoing regulatory adjustments in the markets of the UK (-2% NGR) and Germany, which reported “-30% NGR behind 2022 on a constant currency basis”.

As reported early in the week, US venture BetMGM delivered a substantial increase in H1 NGR to $994m, up 55% YoY, and maintaining an 18% market share. Venture highlights saw it deliver a positive EBITDA in Q2 as BetMGM remains on track to hit the upper end of FY23 NGR guidance between $1.8-$2.0bn. 

Group CEO Jette Nygaard-Andersen, commented: “This has been another period of strong performance for Entain as we make clear strides towards delivering our strategic ambitions.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.

“BetMGM continues to show momentum and backed by our technology and capabilities we are excited by the improvements we are delivering for customers in the US.”

Period trading was underscored by Entain executing four major transactions including the acquisition of Poland’s market-leading betting group STS Holdings for £750m, and the partnership with TAB NZ for unique access to the New Zealand sports betting market. 

The group also completed acquisitions of 365Scores (£120m) and Angstrom Sports (£200m) to diversify its content and product capabilities for entry and expansion into new markets.

H1 accounts saw  Entain record total operating costs of £626m, as Group EBITDA stood at £499m, up 6% against the prior year, helping achieve an underlying corporate profit before tax of £287.6m.

However, the group reported a loss after tax from continuing operations of £502.5m – as corporate governance has reserved a £585m provision to settle an  HMRC investigation into its legacy Turkish business sold in 2017. 

On Turkish affairs,  Entain cited that its deferred prosecution agreement (DPA) negotiations were progressing, in which the company anticipates judicial approval for the settlement during Q4 2023.

Entain underscored a positive outlook for the remainder of 2023, in which it targets  full-year Group EBITDA to be in the range of £1bn- £1.05bn.

Nygaard-Andersen expressed satisfaction with Entain’s strong performance, emphasizing progress in broadening the customer base and the earnings-affective momentum shown by BetMGM.

Group-wide, Entain’s focus remains on sustainable long-term growth and global operating capabilities is expected to deliver value for shareholders in FY23 and beyond.

Nygaard-Andersen concluded in her leadership statement: “The combination of regulation, digitalisation and evolving customer behaviours underpinning a total addressable market opportunity of approximately $170bn over the medium term. Entain’s position as a differentiated leader across diverse and regulated markets enables us to maximise this growth opportunity. 

“Embedded in our ambition of being the world leader in betting, gaming and interactive entertainment, is our ongoing industry leadership in player protection, responsibility and sustainability. We continue to set the standards for our industry, ensuring the powerful Entain platform continues to drive greater diversification, greater scale to leverage our capabilities, higher quality growth and more sustainable earnings across our markets globally.”

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