- Growth in online revenues helps offset continued high street decline
Jackpot: Strong start for new boss Gavin Isaacs
Entain expects full-year profits to come in at the top end of guidance as strong growth in online gambling continues to offset a decline in bricks-and-mortar trade.
The Ladbrokes owner’s net online gaming revenues exceeded expectations in the three months to 30 September, growing 12 per cent on a constant currency basis when excluding the US.
Entain, which has been expanding in the US via its BetMGM joint venture, saw online sales expand across all regions, with the UK and Ireland returning to growth sooner than forecast.
However, retail revenues slipped 4 per cent across the region while in-store sales in all markets were flat year-on-year.
Nevertheless, Entain told investors it now expects 2024 earnings before nasties to come in ‘towards the top’ of a £1.04billion to £1.09billion guidance range.
Chief executive Gavin Isaacs, who joined the group just over a month ago, said: ‘Entain is already on a path of strategic and operational improvement, with the strong Q3 performance demonstrating the progress achieved so far.
‘We are at the beginning of the journey and I’m looking forward to accelerating our progress, leading the business in our next growth chapter and capturing the many exciting opportunities ahead.’
Entain shares were up 3.3 per cent in early trading to 735.8p.
The shares took a hit earlier this week on reports the Labour Government is proposing a £3billion tax raid on the gambling sector.
Entain’s recent growth has been driven by inorganic expansion, with its joint venture with MGM in the US seeing net gaming revenues soar 18 per cent year-on-year during the third quarter.
The group, which also owns Coral, said US growth reflected ‘improved product and increased investment in player acquisition’.
Richard Hunter, head of markets at Interactive Investor, said US growth has proved ‘a tough slog’ for Entain, with ‘promotional investment has been something of a necessary headwind’.
He added: ‘Indeed, being such a fast-growing and lucrative market for providers has quickly led to a level of fierce competition, whereby the joint venture will need to continue running to keep still as other competitors emerge, and as existing players double down on their offerings in terms of pricing, promotion and presence.’
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