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Entain plc provided an update to shareholders on its current trading performance and guidance for FY 2023, as well plans to update them on the progress made in accelerating operational performance and driving shareholder value.
Current Trading
After the summer, Online Net Gaming revenue (NGR) was mixed across the Group but overall, it was lower than expected. The Q3 growth in Online NGR is expected to be high single-digit percentage, but down high single-digit percentage on a preforma basis. Key drivers include:
- Adverse sporting results impacting sports margins during September
- The UK is experiencing a longer than expected regulatory backlash and the industry has not implemented a group wide set of safer gambling measures.
- Australia and Italy experience slower growth than expected
- The quarter saw a good growth in online sales (excluding regulatory impacts), as shown by the continued strong growth of active customers.
- SuperSport, in particular, has performed well since its recent acquisition.
- Retail performance is robust
BetMGM continues to perform well in the US: on track to deliver a positive EBITDA for the second half in 2023, FY2023 guidance of NGR in the upper range of $1.8-$2.0bn; the successful launch of Single Account Single wallet; as well as enhancements to online sportsbooks supporting a strong start to NFL season.
Entain expects Group Online NGR to increase by low double-digit percentage in FY2023 with proforma NGR decreasing by low single-digit percent. The company has reiterated their expectation that FY2023 EBITDA will be between PS1.00bn and PS1.05bn, supported by robust operations controls.
Accelerating Operational Strategy & Performance
Entain underwent a major strategic transformation over the past three years, improving the quality and consistency of earnings. The Group has also aligned its operations in order to be as well-positioned as possible for long-term shareholder value.
Management will provide more details on the actions being taken to accelerate performance, including:
- Comprehensive market review with a focus on sustainable organic growth
- Simplification of group structures and operations for improved operational leverage and cost reduction
- The Group has a plan to migrate acquired businesses onto its industry-leading technology platform
- Optimising our capital allocation priorities
- The Group has made progress in achieving its online EBITDA margin of 30%
Jette Nygaard Andersen, CEO at Entain said: “We are continuing to see good growth in our online business. We have reaffirmed our EBITDA forecast for the year, despite revenue growth that was lower than expected in Q3 as well as the continued rollout of safer gambling measures. Our products and services continue to be enjoyed by more people than ever. BetMGM is on track to achieve positive EBITDA for H2 and an NGR performance that exceeds our expectations. We are especially excited about the new product enhancements we will be launching during the NFL season.
“We have made major changes to the Group in the last three year. We are now focusing on accelerating our actions to drive organic growth, increase our margins and capitalise the US opportunity, while delivering long-term profits for our shareholders. We are confident that we can deliver on the huge opportunities before us. We look forward to sharing further details about the changes we make alongside our Q3 Trading Update in November.”
