Entain, the FTSE 100 betting-and-gambling group, has announced that despite facing regulatory headwinds and softer-than-expected revenue growth in the third quarter, its online business continues to see good underlying growth. The company remains confident in achieving its EBITDA expectations for the year.
Regulatory challenges, particularly in the UK, have persisted longer than anticipated for Entain. Additionally, adverse sporting results in September have impacted online net gaming revenue, affecting sports margins.
In response to these challenges, Entain has undergone a significant strategic transformation over the past three years. This transformation aims to improve earnings quality and align operations, ensuring the company is well-positioned to deliver long-term shareholder value.
According to Entain, its operational strategy involves various measures aimed at improving operational leverage and reducing costs. This includes the simplification of group structures and operations. The company also emphasizes the importance of conducting a thorough market review with a focus on achieving long-term sustainable organic growth. Additionally, Entain plans to optimize its capital-allocation priorities and implement a strategy for migrating acquired businesses onto its technology platform.
Driving Sustainable Organic Growth
Entain is currently prioritizing the acceleration of actions aligned with driving sustainable organic growth. The company aims to expand its margins, capitalize on the U.S. opportunity, and ultimately deliver long-term returns for its shareholders.
BetMGM Joint Venture in the U.S.
Entain highlights the strong performance of its joint venture in the U.S., called BetMGM. The company states that BetMGM is on track to achieve positive earnings before interest, taxes, depreciation, and amortization in the second half of the year. For the entire year, BetMGM’s Net Gaming Revenue (NGR) is expected to fall within the higher range of the $1.8 billion to $2 billion guidance.
Online NGR Outlook
Entain predicts that its group’s online NGR for the year will experience a low double-digit percentage increase. However, Pro Forma NGR is projected to decline by a low single-digit percentage.
EBITDA Outlook for Entain
Entain recently announced its projected EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) figures for the upcoming year. The estimations indicate a range of £1 billion to £1.05 billion ($1.22 billion to $1.29 billion), highlighting the company’s strong operational controls.
This positive outlook signifies Entain’s commitment to sustaining growth and financial stability. With stringent controls in place, the company aims to maximize profitability and capitalize on various opportunities in the market.
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