- World Cup boosts fourth quarter gaming revenues
- Entain lifts 2022 earnings guidance
- Gaming giant enters 2023 with ‘good momentum’
Shares in global sports betting and gaming giant Entain (ENT) rose 2.75% to £15.30 after the company behind the Ladbrokes, bwin and Foxy Bingo brands lifted its earnings guidance for the year to December 2022.
This followed a record fourth quarter for both online net gaming revenue and growth in active customers as the winter World Cup in Qatar drew in punters.
The FTSE 100 company now expects 2022 earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the £985 million to £995 million range, up from its previous guidance of £925 million to £975 million and representing healthy year-on-year growth of around 12%.
WINTER WORLD CUP BOOST
Group net gaming revenue rose 11% year-on-year in the fourth quarter, with Entain generating record online net gaming revenue, which ticked up 12% year-on-year reflecting a ‘successful men’s World Cup’ in Qatar, although weather disruptions to sporting fixtures were said to be a drag.
For the whole of 2022, group net gaming revenue was up 12%. However online net gaming revenue was down 1% versus 2021, which Entain blamed on ‘strong Covid comparators and the absorption of regulatory changes, particularly in the UK and Germany’.
US JOINT VENTURE PERFORMING STRONGLY
Entain, whose other brands include the likes of Sportingbet, Partypoker and Gala, also has a 50/50 joint venture with MGM Resorts (MGM:NYSE), ‘BetMGM’, which is a leader in sports betting and iGaming in the US and ‘continues to perform strongly’.
According to Entain, BetMGM is ‘well positioned’ to generate net revenue of between $1.8 and $2 billion in 2023 and is on target to be EBITDA positive in the second half of this year.
BetMGM’s longer-term targets for US market share of around 20% to 25% and EBITDA margins of 30% to 35% remain unchanged.
WHAT DID THE CEO SAY?
Entain chief executive Jette Nygaard-Andersen characterised 2022 as ‘another year of strong financial, operational and strategic progress’ for the group.
‘We have continued to grow our revenues in a sustainable and diversified way by expanding our global footprint, broadening our customer appeal, entering new areas of entertainment, and providing a safe environment for our customers.
‘All of this has led to a record number of active customers in Q4, as well as a full year EBITDA performance ahead of our previous expectations.’
Nygaard-Andersen insists Entain started 2023 with ‘good momentum across the business’ and remains ‘confident in our ability to continue delivering on our growth and sustainability strategy in the year ahead.’
Shore Capital has a ‘buy’ stance on Entain and argues that at around the £15 per share level the valuation is ‘too low given the scale and strength of the offering and the structural opportunities globally, most notably but not exclusive to North America.’
