Entain plc Reports FY23 Financial Performance

Entain plc (LSE: ENT), a global group specializing in sports betting and gaming, has announced its financial outcomes for the year that ended on December 31, 2023. The company reported that its total Net Gaming Revenue (NGR), which includes a 50% contribution from BetMGM, increased by 14%. When adjusted for certain factors, the growth rate stands at 2%. The NGR for the group, excluding the US market, rose by 11%, with a slight decrease when adjusted.

The online sector of the business saw a 12% rise in NGR, but when adjusted, there was a slight decrease of 3%. Despite regulatory challenges, the adjusted online NGR still managed a growth of 3%. The company also observed a significant increase in online customer activity, with a 23% year-on-year rise.

The retail sector’s NGR went up by 9%, with the performance partly attributed to new acquisitions in New Zealand and Poland. BetMGM, a part of the company’s operations, showed a 36% increase in NGR, achieving a 14% market share in the areas it operates.

Entain has been expanding its presence, notably with acquisitions in Poland and a partnership in New Zealand, aiming to tap into significant growth opportunities. The company faced a financial penalty related to its operations in Turkey, which was sold in 2017, impacting its financials for the year.

The group’s EBITDA was slightly up by 1%, totaling £1,008 million. The company proposed a total dividend of £113 million for the year, with a second interim dividend of £56.5 million.

Entain continues to focus on operating within regulated markets, with a commitment to sustainability and responsible gaming. It has received recognition for its efforts in environmental, social, and governance (ESG) aspects.

Looking forward, Entain is trading in line with its expectations, with early positive signs from improvements made in Brazil and the US. However, anticipated regulatory changes in the UK and the Netherlands are expected to influence its operations and financial performance.

Entain is also working on improving efficiency and reducing costs through Project Romer, targeting £70 million in savings by 2025. This effort reflects the company’s strategy to streamline operations and enhance its market position.

Barry Gibson, Chairman of Entain, commented: “2023 was a period of necessary, but ultimately positive, transition for Entain. We have significantly strengthened the quality of our revenue base, enhanced our Board, and delivered a resolution to a critical, historic, regulatory issue.

We are making positive progress in our search for a new permanent CEO, and in the meantime Stella is driving the business as it continues to take appropriate actions to deliver changes to drive a better long term performance. We are also making good progress in adding to our Board strength – Ricky Sandler and Amanda Brown joined the Board in recent months and we expect to announce a further appointment shortly.

As our transformation continues the newly formed capital allocation committee has commenced a review of Entain’s markets, brands and verticals. The objectives of the review are to help focus the organization, improve competitive positions and maximize shareholder value.”

Stella David, Interim CEO of Entain, commented: “2023 presented a number of challenges for the Group, both industry-wide and Entain-specific. I am extremely proud of how our people around the world came together to navigate the business through an eventful and at times difficult year. Against that backdrop, Entain was still able to deliver overall revenue growth of 14% including our US joint venture achieving revenue at the top end of expectations.

We have started the new financial year with a clear plan to accelerate our operational strategy, and are making pleasing progress across a range of initiatives to re-focus our market portfolio, prioritise organic growth, drive our share in the US, and expand our margins. We are entirely focused on operational excellence and outstanding execution and, as a result, are confident that we are on a pathway to delivering future growth. We remain confident that our continued focused execution will drive organic growth into 2025 and beyond.”