- Full-year profit at top end of range
- Comfortable with 2025 consensus
- £500 million annual cash flow target
Sports betting and gaming group Entain (ENT) delivered full-year profit at the top end of the guided range and said it was comfortable with consensus forecasts for 2025, which was enough to give the shares a 3% pop to 764.4p.
The shares are up by around a tenth so far in 2025 versus a 5% advance for the FTSE 100 index, despite announcing the sudden departure of its CEO Gavin Isaacs last month.
WHAT DID THE COMPANY SAY?
Interim chief executive Stella David commented: ‘2024 has been a year of transformation for Entain. I am delighted to see our strategic and operational improvements are translating into strong performance; clear evidence that our strategy is delivering.
‘Our return to organic growth is the beginning of our rebuild journey; our momentum continues, and we have started the year strongly.’
Group net gaming revenue increased 6% to £5.16 billion for the year to 31 December, which generated 8% underlying growth in EBITDA (earnings before interest, tax, depreciation, and amortisation) to £1.089 billion compared with a guidance range of £1.04 billion to £1.09 billion.
The Ladbrokes and Coral owner said the strong momentum seen in the final quarter had continued into the new financial year, with trading benefiting from operator-friendly sports margins.
The US Super Bowl proved to be the most popular event ever for Entain, which took over two million bets, up 16% on the prior year and equivalent to 8,000 bets per minute at the peak.
The company said it remained comfortable with 2025 consensus market forecasts which call for EBITDA of £1.11 billion and an online EBITDA margin of 25%, flat year-on-year.
The US BetMGM business is expected to generate between $2.4 billion and $2.5 billion of revenue and to turn EBITDA positive.
Continued operational and strategic progress underpin the company’s confidence in achieving its medium-term goal of generating £500 million of annual adjusted cash flow.
WHAT ANALYSTS ARE SAYING
Shore Capital’s Greg Johnson said Entain’s guidance was consistent with his forecast for £1.105 billion of EBITDA and he didn’t expect to make any material changes at this stage.
Johnson currently anticipates around $100 million of losses at BetMGM, leaving scope to ‘nudge up’ estimates as the year progresses.
Analyst Paul Leyland at consultancy Regulus Partners commented: ‘Entain has been through the regulatory, strategic, operational and governance mill, so a year of essential marking time in terms of overall group performance is not a bad outcome; it is a bit of a stretch to dress the performance up as good though, in our view.’
