Entain shares dive 10% as Ladbrokes owner warns of stagnating online trade even as post-Covid betting boom keeps pace
- Entain’s retail turnover exceeded pre-pandemic levels in the second quarter
- The FTSE 100 firm owns gambling brands Foxy Bingol, Sportingbet and Bwin
- Its total net gaming revenues increased by 18% in the opening half of this year
Entain has seen retail in-store trade surpass forecasts, but the gambling group has warned that annual online revenue is set to flatline.
The Foxy Bingo and Ladbrokes owner reported that overall net gaming revenue rose by 18 per cent in the first half of 2022 as British betting shops benefited from a lack of operating restrictions.
Turnover from the company’s high street stores jumped a colossal 243 per cent during the period, exceeding pre-pandemic levels in the second quarter thanks to strong demand for gaming and self-service betting terminals.
Growth: The Ladbrokes owner reported that overall net gaming revenue rose by 18 per cent in the first half of 2022 as British betting shops benefited from a lack of operating restrictions
Bookmakers and other gambling businesses were forced to temporarily close their retail establishments for much of the Covid-19 pandemic in order to stem the spread of the disease.
This inevitably caused them a significant loss in trade, but had the upside effect of driving punters to place digital bets. Entain has achieve 23 successive quarters of double-digit percentage expansion in online revenue.
Yet as restrictions have loosened, the London-listed firm, whose brands also include Coral, Sportingbet and Bwin, has been hit by a slowdown in internet gambling as customers have returned to high street outlets and casinos.
Its first-half digital revenues were still 13 per cent higher on a constant currency basis against the equivalent period in 2019, but down 7 per cent on last year.
The group additionally blamed economic pressures, the shutdown of its Netherlands business and stricter affordability measures in the UK for the downturn.
Entain now anticipates total online net gaming revenues in 2022 will be around last year’s levels, compared to previous guidance of mid-to-high single-digit percentage growth.
Following the release of its second-quarter results, Entain shares declined by 9.8 per cent to 1,028.5p in morning trading, meaning their value has plunged by around 39 per cent in the past 12 months, and making it the biggest faller on the FTSE 100 Index.
Despite the new outlook, chief executive Jette Nygaard-Andersen expressed optimism about the company’s future, telling investors that ‘the underlying performance of our business remains strong’.
She added: ‘With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A (mergers and acquisitions) will enable us to deliver further progress against our strategy.’
In the past month, the company has announced the acquisition of Dutch online gaming operator BetCity in a deal worth up to £472million, which it expects to complete later this year.
Its BetMGM joint venture has also forged tie-ups with Carnival Corporation to offer cruise ship gaming, and with Sony Pictures Television and slot machine producer IGT to launch a digital casino based on the television show Wheel of Fortune.