Entain H1 NGR up 6% as UK and Ireland declines offset by Brazilian growth

Entain has reported a 6% year-on-year (YoY) rise in group NGR on the back of strong growth in Central and Eastern Europe (CEE), helping to offset declines in UK and Ireland performance.

The London-listed firm posted NGR for the six months to 30 June of £2.6bn, up from £2.4bn in H1 2023.

The operator said the increase had reflected “underlying Q2 outperformance and stronger than expected win margins for the Euros”.

Sports betting NGR jumped 14% YoY to £1.3bn, while gaming NGR slipped 2% to £1.2bn. The company also noted a 50% leap in B2B NGR, climbing to £31.4m.

Underlying EBITDA grew 5% from £499.4m to £524m.

However, underlying operating profit fell 6% to £287.9m, while underlying pre-tax profit slumped 13% to £248.8m. Post-tax losses shrank to £47m after a £502.5m loss was recorded in H1 2023.

Meanwhile, active online customers rose 13% YoY on a pro forma basis for the group.

Breaking operations down by vertical, group online NGR jumped 9% to reach £1.8bn, with a 20% rise in sports betting NGR within that division to £887.2m. Gaming NGR remained flat YoY at £898.8m.

Those figures exclude Entain’s 50:50 North American JV, BetMGM, which it runs in partnership with MGM Resorts International, although total group revenue does include the 50% contribution from the brand.

Online NGR in Q2 improved 5% on a constant currency (cc) basis to drag the business forward after a 2% decline in Q1.

Bosses said Euro 2024 played a key role in delivering the spike, while Brazil, which was described as a “must win” market, also showed significant signs of growth, with NGR up 28% in H1.

Retail NGR remained flat, though, with a 1% uptick, to £738.3m.

Looking at core geographies, the UK and Ireland division’s total NGR slipped 6% to £1bn as online operations in the market returned an 8% drop in NGR to £466.9m.

Q2 did prove slightly better than Q1, with a NGR decline at 5% YoY compared to 7% in the first three months of the year.

Entain said the slide was in line with expectations as bosses stated that the online performance had reflected “prior year comparative regulatory headwinds, partially offset by improving player KPIs driven by product and offering enhancements including greater simplification of our player journeys”.

International NGR rose 7% to £1.3bn, driven by the aforementioned gains in Brazil and a returned to flat YoY NGR growth for Australia. Entain did note the division’s NGR was up 10% on a constant currency (cc) basis.

Italy, however, reported a 3% dip in NGR on a constant currency basis with customer-friendly Q1 sports betting results taking their toll.

On a pro forma basis, CEE NGR rose 12% cc, with Croatian operator Supersport performing well as it reported a 17% cc NGR rise.

Entain CEE also includes Polish operator STS, which was acquired in H1 last year. Adding the brand’s contribution, regional NGR shot up 126% to £240.9m.

In the US, BetMGM had previously reported H1 revenue of $1bn alongside an EBITDA loss of $123m.

The operator claims to have a 13% market share across sports betting and igaming, with the product available to 52% of the North American population.

Elsewhere, Entain revealed further ‘Project Romer’ efficiencies had been established, with the group increasing its net savings target to £100m for 2026, up from £70m.

As a result of the H1 trading update, full-year 2024 guidance has been upgraded, with EBITDA expected to be in the range of £1.04bn to £1.09bn.

Pro forma growth in online NGR is expected to be low single-digit positive, improving from a low single-digit decline in 2023.

Entain said the changes were “reflecting uplift from stronger than expected Q2 NGR performance, revised timing of regulatory implementation in Brazil and the Netherlands [and] offset by FX headwinds”.

Last month, the operator confirmed Games Global chair Gavin Isaacs would become CEO on 30 September, ending the hunt for Jette Nygaard-Andersen’s successor.

Interim CEO Stella David will step up to become chair as the incumbent Barry Gibson will retire.

Speaking on the H1 performance and Isaacs’ upcoming arrival, David said: “Entain’s H1 results are clear evidence that our hard work improving the group’s operational performance is bearing fruit.

“While there is more work to do, we are pleased with the progress so far and look forward to building further on these solid foundations in H2 and beyond.

“Our focused execution underpins the group’s performance so far this year, and we are excited by the opportunities ahead. I look forward to welcoming Gavin Isaacs as our new CEO and supporting him as we continue to build on the group’s improving operational momentum.”

Entain’s share price is up almost 7.6% at the time of writing to 563p.