Muscular Return of Retail Spares Entain’s Blushes in H1

The muscular “return of retail” helped save gaming giant Entain’s blushes in H1, reveals its latest Interim Financial Report.

Despite a decline in Online, and reduced spend by its growing body of loyal customers, the Omnichannel’s Net Gaming Revenue (NGR) grew by 18 per cent to £2.11 billion (US$2.55bn/€2.5bn) during the half, ending June 30, compared to £1.79 billion (US$2.16bn/€2.12bn) in H1, 2021.

The ending of Covid lockdowns saw the FTSE100 company’s retail sector registering NGR of £354 million (US$428.41m/€420.85m) in the half — up 250 per cent, y-on-y.

Ladbrokes Coral in the UK and Eurobet Italia were the stars of the period show, even performing above pre-pandemic levels, hitting retail EBITDA of £141 million (US$170.64m/€167.62m) – compared to a loss of £61 million (US$73.82m/€72.51m) in the first half of 2021.

“Our retail operations performed strongly during the first half of 2022,” said Entain CEO Jette Nygaard-Anderson.

“Post Covid and its associated lockdowns, customers are re-engaging with the more interactive experience our shops provide — with volumes ahead of pre-Covid levels.”

As a result of its headline growth, Entain announced that it had decided to pay shareholders a dividend for the first time since 2019. The first tranche of the dividend, representing 8.5 pence per share, some £100 million (US$121.02m/€118.88m), will be disbursed in September.

But H1 success was achieved despite the group suffering a seven per cent slide in online revenue, year-on-year, to £1.47 billion (US$1.77bn/€1.74bn).

And some analysts believe that the Omnichannel will continue to experience sluggish iGaming performance well into next year.

Entain sports brands, for example, saw a six per cent fall of NGR to £702 million (US$849.57m/€834.57m), with online EBITDA plunging 22 per cent to £384 million (US$464.72m/€456.51m).

And there were big drops across many of the group’s Western European imarkets: Germany falling 19 per cent, the UK 15 per cent and Italy 12 per cent.

Entain, meanwhile, is betting that its recent grab of online operators in Croatia, The Netherlands, Latvia, Poland and Canada will counter negativity and power-up its iGaming action.

Despite difficulties in New York State, its BetMGM offering remains the number two sportsbook in the US, behind DraftKings, they claim.

And the joint venture remains on track to finally post positive EBITDA “sometime” next year.

Overall, stressed Entain: “[Our] group’s momentum remains strong and our outlook for the balance of the year is unchanged.”

2022 Full Year Group EBITDA is expected to be in the region of £975 million (US$1.17bn/€1.159bn).

“The economic environment remains uncertain in many of our markets,” the Entain Board conceded.

“[But] we remain confident that our proven ability to deliver growth will see us deliver further progress for all stakeholders.

“We continue to make excellent progress on our strategic priorities, with momentum in our business remaining strong as a result of putting the customer at the heart of everything we do.”