Entain warns of 2024 EBITDA impact for UK and Netherlands as FY23 NGR jumps 11%
London-listed operator notes strong reported gains for online casino as pro forma figures falter after whirlwind year for the business
Entain has reported a 12% year-on-year (YoY) rise in group online net gaming revenue (NGR) for full-year 2023, but saw the metric slip 3% on a pro forma basis.
The FTSE 100 firm had a turbulent 2023 with the departure of former CEO Jette Nygaard-Andersen in December and the conclusion of the investigation into a formerly owned Turkey-facing business.
In fact, the £585m penalty Entain was handed as a result of the HMRC settlement into allegations of bribery saw full-year group losses landing at £879m, after tax.
Operationally, Entain pointed to regulatory headwinds in the UK and Germany as well as soft trading in Australia and Brazil, but championed its 50% stake in US-facing JV BetMGM which delivered a 35% jump in NGR.
In terms of verticals, online sports betting NGR rose 6% on a reported basis, but was in fact down 9% on a pro forma basis.
Online casino NGR leapt 17%, while on a pro forma basis remained relatively flat with a 2% uptick.
Total group NGR, which also encompasses retail operations, was up 11% to £4.8bn
Elsewhere, reported group EBITDA increased by 1% to a little over £1bn, while group EBITDA, excluding New Zealand TAB, was in line with expectations at £974m.
Online-only EBITDA landed at £830m, which Entain said conformed with 2022 performance.
However, looking ahead to 2024, the operator highlighted that the slot stake limits to be introduced in the UK in September, and potential deposit limits in the Netherlands, could impact EBITDA by around £40m.
Entain did note Brazil was showing signs of improvement in Q1, while BetMGM’s single account single wallet (SASW) functionally in Nevada later this year will give the JV another boost.
Also, on 1 March 2024, Entain raised an additional £300m of borrowings under a bank loan facility, using the proceeds to repay “all amounts drawn under the group’s revolving credit facility”.
Stella David, Entain interim CEO, said the business would “not be treading water” despite the transition period it finds itself in.
She said: “2023 presented a number of challenges for the group, both industry-wide and Entain-specific.
“I am extremely proud of how our people around the world came together to navigate the business through an eventful and, at times, difficult year.
“We are entirely focused on operational excellence and outstanding execution and, as a result, are confident that we are on a pathway to delivering future growth. We remain confident that our continued focused execution will drive organic growth into 2025 and beyond.”
“We have clear targets to deliver. I will focus on driving the execution of our revised strategic priorities until the appointment of a new, permanent CEO,” she added.