Stocks Tracker: Flutter flourishes as rivals’ H1s more harmful than helpful
EGR analyses the share price movements of major industry players in August including 888, Entain and Flutter
Entain
1 August closing: 1,216p
31 August closing: 1,273p
Peak August closing: 1,419.50p
The sandwich technique is a classic workplace mind trick – a piece of bad news betwixt two pieces of good news to soften the blow. Entain, however, got the recipe all mixed up in August as a pleasant starter was swiftly followed by two foul courses which corresponded with the FTSE 100 firm’s share price slipping in the backend of the month.
After shaking off the effects of a disappointing July, Entain saw its share price rise steadily during the opening part of the month ahead of its H1 report, with eager eyes on news regarding ramped up safer gambling measures in the UK and the performance of its US JV, BetMGM.
Instead, Entain surprised the market by announcing it had acquired leading Croatian operator SuperSport in a JV with Czech investment management company Emma Capital.
The London-listed firm’s continued M&A strategy and impressive US return ($607m net gaming revenue (NGR)) offset the news of an overall NGR downturn of 7%.
The company’s share price rose from 1,308.50p to close at 1,357.50p on Thursday 11 August as the market responded positively.
However, rising share prices eventually hit the ceiling and bounced back with force after peaking at 1,419.50p on Monday 15 August, as a double whammy of bad news shocked Entain’s stock.
On Wednesday 17 August, the UK Gambling Commission ordered Entain to pay £17m relating to failings in the operator’s social responsibility and anti-money laundering (AML) policies, resulting in Entain’s stock falling from 1,406.50p to 1,383p by the close of trading.
No sooner had the dust settled before the Ladbrokes Coral parent company was named in a £6m lawsuit over the sale of its Intertrader financial brokerage business to London-based venture capital firm Burren Capital Advisors Ltd Friday 19 August.
The claim alleges that Entain (named in the suit under its ElectraWorks business) transferred money out of the Intertrader business via one of the firm’s subsidiaries back to Entain in order to avoid having to pay out on a cash shortfall trigger included as part of the acquisition agreement.
The news sent Entain’s share plummeting from 1,372p to close out the week at 1,319p, a position from which it failed to recover for the rest of the month.
888
1 August closing: 144.40p
31 August closing: 123.40p
Peak August closing: 160p
An awful August for 888 on the stock market will not have been what the firm’s top brass would have wanted ahead of its new era following the completion of its £2bn acquisition of William Hill.
In the build up to the firm’s H1 results announcement on Friday 12 August, there were initial signs of positive growth for the operator, navigating its way from a monthly opening of 144p to a monthly high of 160p the day before the results were published.
What followed sent 888’s stock tumbling, closing out at 142.70p as significant revenue and EBITDA downturns did little to appease the market.
888 posted a 13% year-on-year (YoY) decline in H1 revenue to £332.1m, an EBITDA slippage of 29% to £50m and a decrease in pre-tax profit of 66% to £14.4m.
UK revenue fell by 25% due to further safer gambling measures while Dutch revenue dipped 13%.
A weekend out of the firing line saw 888’s share price close out at 156.60p on Monday 15 August, although the remainder of the month was not pleasant viewing for 888 shareholders as the group’s price continued to slide.
In fact, the monthly low of 123.40p was the lowest 888’s stock has been since April 2020, at the height of Covid-19 lockdowns when gambling firms’ share prices were battered.
Despite the disappointing performance, CEO Itai Pazner remains positive in his outlook and championed the Hills acquisition as a key driver of future growth.
He said: “There are synergies in igaming, bringing 888’s best-in-class gaming products over to all of William Hill’s business, including 888 games, the games that we deliver to William Hill’s customer base both online and in retail.
“In terms of sports betting, there’s obviously taking all the capabilities that have been built in terms of trading and managing sports on William Hill and leveraging them also on 888,” Pazner added.
Flutter Entertainment
1 August closing: 8,278p
31 August closing: 10,765p
Peak August closing: 10,950p
A positive month for Flutter Entertainment sent its share price into the five-figure fold once again as sustained H1 growth and the completion of the acquisition of Italian operator Sisal yielded a positive reaction from the market.
Flutter finalised its acquisition of Sisal on Friday 5 August and confirmed that CEO Peter Jackson’s former chief of staff Portia Walker will lead the integration of the firm into Flutter’s International division.
The group’s share price had been rising following a poor performance in July, with Flutter’s stock languishing between 8,000p and 9,000p.
On Friday 12 August, Flutter revealed a 9% YoY increase in revenue to £3.4bn on a constant currency basis, with sports betting jumping 10% to £2.1bn and gaming rising 8% to £1.2bn during the first six months of the year.
The firm’s US-facing FanDuel business was the jewel in the crown, as revenue leapt 50% to just over £1bn, with FanDuel holding a 51% share of the online sportsbook market in the US and an overall combined market share (inclusive of igaming) of 36%.
Despite a 19% decrease in group EBITDA to £476m, the market sent Flutter’s share price on a hockey stick growth journey.
The London-listed firm’s share price closed at 10,705p, rising from Thursday 11 August’s close of 9,382p.
Confirmation of the group’s pending restructure of its UK & Ireland division, with the potential for as many as 200 voluntary redundancies, failed to register with the market.
The skyrocketing share price following the results announcement sustained Flutter’s share price above the 10,500p threshold for the remainder of August, leaving a subpar July a distant memory.
Better Collective
1 August closing: SEK160.40
31 August closing: SEK146.50
Peak August closing: SEK160.40
Good guys finish last is what we are told. The bad kids always get the glory despite their shortcomings, while those who play by the rules are left battered and bruised. Affiliate giant Better Collective will be feeling this adage more than most after its stock plummeted in August despite sustained YoY growth in Q2, a promise to attack the US with continued vigour and a significant senior hire.
A strong start to the month saw Better Collective’s share price peak at SEK160.40 before dipping slightly to SEK148.20 and eventually recovering in the weeks leading up to its Q2 results announcement.
On Tuesday 23 August, the Danish firm recorded a 40% YoY growth in Q2 revenue to €56m, up from the €40m recorded in Q2 2021. US revenue soared 90% while new depositing customers also jumped by a huge 93% to 387,000.
Coupled with a new commercial partnership agreement with Boston.com, the outlook looked rosy on the surface, before the markets duly dashed these hopes as the group’s share price fell throughout the week.
An initial surge on results day to SEK146.60 from a previous close of SEK141.80 was short lived, as the following day Better Collective’s stock fell to SEK139, before closing at a monthly low of SEK137.90 the following Monday.
An impressive leap saw the firm close out the month at SEK146.50 to recover slightly, but still left the company well down on its early month performance.