By Anthony O. Goriainoff
Entain said it continued to see good underlying growth in its online business despite softer-than-anticipated revenue growth in the third quarter and the continued roll-out of gambling regulations, and backed its Ebitda expectations for the year.
The FTSE 100 betting-and-gambling group said Monday that, among other things, regulatory headwinds are persisting longer than expected, especially in the U.K. It added that online net gaming revenue has been softer than anticipated as adverse sporting results hurt sports margins in September.
The company–which owns the sports-betting outlet Ladbrokes–said it has undergone a significant strategic transformation over the past three years which aims to improve the quality of earnings and align operations so as to ensure it is positioned as strongly as possible to deliver long-term shareholder value.
It added that its operational strategy included the simplification of group structures and operations to improve operational leverage and cost-reduction, as well as a comprehensive market review focusing on long-term sustainable organic growth. Entain said this also included optimizing its capital-allocation priorities, and a plan for the migration of acquired businesses on to its technology platform.
“Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalize on the U.S. opportunity and deliver long-term returns for our shareholders,” it said.
The company said BetMGM, its joint venture in the U.S., continues to perform well and is on track to deliver positive earnings before interest, taxes, depreciation and amortization in the second half. For the year it is expected to deliver NGR at the upper end of its $1.8 billion to $2 billion guidance range.
The company said it expects group online NGR for the year to be up by a low double-digit percentage, with pro forma NGR down by a low single-digit percentage.
Ebitda for the year is expected to be in the 1 billion to 1.05 billion pounds ($1.22 billion to $1.29 billion) range, supported by robust operational controls, Entain said.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
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