SBC News Entain to keep brand portfolio and core strengths following CAC review

Entain to keep brand portfolio and core strengths following CAC review

Entain Plc has announced that the Capital Allocation Committee (CAC) has concluded the strategic review of the FTSE gambling group’s operating structures, global portfolio of brands, and funding.

Entain’s board appointed the Committee in January to undertake its review “with the objective of maximising shareholder value and reflecting the operational progress of the business,” as full-year 2023 results declared corporate losses totalling £900m.

The Committee’s strategic review concluded that“Entain has the appropriate portfolio of diversified strategic assets, brands, capabilities, and geographic footprint to ensure it is well positioned to deliver high-quality long-term growth.”

As such, the board of Entain is advised to continue to prioritise North American growth, which carries a ‘significant upside’ by focusing on organic growth of the BetMGM brand and enlarging its operating margins.

Entain maintains a ‘robust financial position’ by strengthening and improving its balance sheet following recent refinancing and term loan adjustments of $ and € debt equivalent to £600m.

The Committee reviewed Entain’s global portfolio, in which it deemed Crystalbet in Georgia as non-core of the firm’s +30 brands currently under management. Markets were informed that Entain is considering strategic alternatives for Crystalbet Georgia, including interest already received from potential acquirers

SBC News Entain to keep brand portfolio and core strengths following CAC review
Barry Gibson: Entain

Barry Gibson, outgoing Chairman of Entain Plc, commented on key recommendations: “I am delighted that the Capital Allocation Committee has concluded its strategic review of our portfolio. Whilst we still have more work to do to improve our operational performance, the Board is pleased with the progress Entain is making so far in 2024 in line with our strategy.

The Group has the core strengths, brands, and products to be competitive across its markets and continues to be a global leader in betting and gaming.”

As part of its strategic review, the Committee considered key market developments and operational progress. They observed strong developments in Brazil, “returning to strong double-digit revenue growth during Q2” with actions taken to improve customer acquisition and retention accelerating our performance.

In the UK, new regulatory measures and an enhanced customer offer are expected to drive growth later this year. Meanwhile, the Committee viewed strong prospects for the joint-venture of Entain CEE, taking market share growth in under-penetrated Eastern European markets.

North American developments show BetMGM’s product roadmap advancing well, with new MLB and NBA sports betting markets leveraging newly acquired Angstrom’s sportsbook tech capabilities. Further positive H1 developments in the US, saw the Nevada Gaming Commission approved Entain’s applications and “certain of its subsidiaries without limitation.”

The Committee marked Project Romer as a key technical priority, which is on track to achieve cost savings through operational simplification of the FTSE global operating structure.

The update concluded that the CAC will continue to regularly review strategic progress and consider options to maximise shareholder value, including ongoing oversight of all significant aspects of capital commitments.

Further H1 announcements saw Entain confirm that Barry Gibson will step down as chairman in September. Gibson will be replaced by interim CEO Stella David, dependent “on the timing of a new CEO appointment”… A directive overseen by the board since December, following the resignation of Jette Nygaard-Andersen.

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