11th Aug 2022 14:29
(Alliance News) - Entain PLC raised the stakes against its London-listed rivals as the gambling company ventured into Eastern Europe and declared a dividend for the first time since the onset of Covid-19, promising a "progressive" payout going forward.
It has also announced an acquisition, betting on a "leading" gaming and sportsbook operator in Croatia, which it will buy through a newly established joint venture.
Entain shares were 6.0% higher at 1,388.00 pence each in London on Thursday, the best performer in the FTSE 100.
The Ladbrokes and Coral owner posted revenue of GBP2.09 billion for the six months ended June 30, up 19% year-on-year from GBP1.77 billion.
Underlying earnings before interest, tax, depreciation and amortisation climbed 17% to GBP471 million from GBP401.1 million.
Pretax profit, however, tumbled by 70% to GBP39.5 million from GBP130.6 million. Entain's bottom-line was hit by a GBP55.0 million foreign exchange hit, swinging from a GBP77.1 million tailwind a year earlier.
All-in-all, however, the gambling firm made "excellent progress" during the half.
Aside from Ladbrokes and Coral, Entain also owns the bwin and partypoker brands. In addition, it has a 50% stake in US brand BetMGM, alongside MGM Resorts International.
Entain said: "Following a strong performance in the first half of 2022, delivering net gaming revenue of USD608 million, BetMGM remains on track to deliver over USD1.3 billion of NGR in 2022."
Turning to returns, Entain said it was implementing a new dividend policy. It is proposing a progressive dividend, starting with a total dividend of GBP100 million for 2022, to be paid to shareholders in equal instalments in respect of the first half and annual results.
Entain declared an interim dividend of 8.5 pence per share, which would be its first payout since the onset of the pandemic.
Separately, Entain said it has partnered with EMMA Capital, an investment firm based in the Czech Republic, to establish a new venture, Entain CEE, to drive expansion in Central and Eastern Europe.
The London listing will own 75% of the economic rights in Entain CEE, with EMMA Capital owning the other 25%. Entain CEE will acquire the SuperSport Group, the gaming and sportsbook operator in Croatia from EMMA. The deal would value SuperSport at EUR920 million.
Entain will pay EUR600 million at completion and a further EUR90 million based on SuperSport's Ebitda for 2022.
Matt Britzman, equity analyst at Hargreaves Lansdown, highlighted that the resurgence of in-person betting continued over the first half and was undeterred by a cost-of-living crisis and broader economic uncertainty.
Britzman said: "Positive performance and the rebound of retail has paved the way for a fresh and revitalised dividend policy. Starting at GBP100 million over the current year, split between the first and second half, that's expected to grow from here. Good news for investors, though that will put added strain of cash that's already being snapped up in BetMGM and the acquisition led growth strategy.
"Speaking of BetMGM, the group's joint venture over the pond, performance remains strong. Profits should start to flow at some point next year and BetMGM management have recently upped their forecast addressable market to around USD37 billion, there's a big slice of pie up for grabs."
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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