Takeover talk no distraction as Ladbrokes owner Entain unveils rising profits

Shares in Entain have reached record highs in recent weeks as takeover speculation has swirled around the owner of Ladbrokes and Coral, but the company said that was not a distraction as it unveiled rising profits for the first half of 2021 on Thursday.

Online gambling drove the growth with lockdown restrictions affecting retail betting, aided by a full sporting calendar including a record-breaking Euro 2020.

Entain's share price has risen due to speculation that American casino giant MGM Resorts, its partner in US joint venture BetMGM, was preparing a bid, Entain having rejected an offer of $11 billion (approx £7.9bn) from them earlier this year.

BetMGM has established itself as the number two operator in the US's fast-growing sports betting and iGaming market, which is expected to grow from $6bn today to around $32bn over the long term.

Entain's chief financial officer and deputy chief executive Rob Wood said the speculation was "not a distraction at all, we have a great relationship".

He added: "Why wouldn't we? We've both got a fantastic business that so far we have tipped in a few hundred million dollars and it has got to be worth north of $10bn now. That is an incredible return on investment.

"Whenever businesses start underperforming that's when relationships get tested but we are doing so well, the relationship is great. Speculation will be what it will be but what we focus on is our independent growth story.

"We have got fantastic growth opportunities, not just the current business as we are today but also where we want to take the business tomorrow and that's what's really exciting for us."

Entain said business at Euro 2020 was greater than the last World CupCredit: Alex Morton - UEFA

Wood said Euro 2020 had been "easily the busiest tournament we've ever had at any sporting event on our platform", adding: "I think we touched a little over three million customers across all platforms, all channels, all countries – considerably bigger than the World Cup three years ago.

"Now the trick is to try and retain as much of that new activity into the start of the football season and beyond."

Entain's group earnings for the first six months of the year rose by 12 per cent at £401 million, while net gaming revenue (NGR) was up 11 per cent to nearly £1.8 bn.

The company delivered its 22nd quarter of online growth, with NGR up 28 per cent, and while retail NGR was down 46 per cent Entain said there had been "encouraging early trends" as betting shops reopened, with business in UK betting shops returning to around 90 per cent of pre-pandemic levels.

"We do think there is a bit more life in the retail estate in terms of year-on-year growth," Wood said.

The company reiterated it expected Ebitda (earnings before interest, taxation, depreciation and amortisation) for 2021 to be in the range of £850-£900m.

It also revealed it was moving into the burgeoning esports sector having agreed to acquire the technology platform, products and team of esports betting and entertainment media company Unikrn.

Entain chief executive Jette Nygaard-Andersen

Chief executive Jette Nygaard-Andersen said: "Entain’s platform continues to deliver. The quality and diversification of our businesses has enabled us to deliver our 22nd consecutive quarter of double-digit online growth, while also making excellent progress on our strategic priorities.

"This performance is not only a result of our industry-leading technology, but also the hard work and dedication of our talented teams of people around the world, and I would like to take this opportunity to thank them."

Entain's share price closed down 23p at 1,942.50p on Thursday afternoon.

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