Stocks Tracker: Full-year results and financial penalties lead to March madness
EGR analyses the share price movements of major industry players over the previous month, including 888, Entain and Flutter
888
1 March closing: 70.45p
31 March closing: 51.60p
Peak March closing: 71.40p
It is arguable that 2023 is turning out to be an annus horribilis for 888 after a turgid Q1 for the London-listed operator. The firm is still dealing with the fallout from the departure of long-standing CEO Itai Pazner in January, coupled with revelations around compliance issues with its VIP offering in the Middle East. Any respite the firm was eyeing in March from its travails failed to materialise, when instead, 888 was dealt a jab and hook combination that sent its share price down by more than 26% this month alone.
Firstly, 888 lost its spot in both the FTSE 250 and FTSE 350 on Monday 20 March as compilers at the London Stock Exchange dropped the firm as part of their quarterly review of the indices. 888 saw its share price drop to 57.60p at the close of trading in its first week in the indices wilderness. The exit typified the firm’s current difficulties, with year-to-date losses on Tuesday 21 March sitting at just over 32%.
There was a slight uptick during the week, but this was quickly quashed as the week commencing Monday 27 March would usher in a record-breaking announcement in UK gambling history.
On Tuesday 28 March, 888-owned William Hill was hit by a record £19.2m penalty from the UK Gambling Commission relating to historic failings in its social responsibility and anti-money laundering (AML) processes.
888 was quick to note the infringements came under Hills’ previous ownership and before the £1.95bn acquisition of William Hill International last year.
However, the group’s share price continued its downward turn, closing out at 54.45p, desperately close to its 52-week low of 53.75p.
888 will be hoping the only way is up for the remainder of 2023 after a forgettable first three months.
Entain
1 March closing: 1,363p
31 March closing: 1,257p
Peak March closing: 1,399p
One would have thought that after recording almost £1bn in full-year 2022 EBITDA, representing a 13% rise, coupled with a 7% jump in active customers, Entain could confidently expect its share price to tick up nicely as a result. Reader, it didn’t.
Despite recording impressive top- and bottom-line growth over the last 12 months, London-listed Entain saw its stock slip on Thursday 9 March to 1,329p from a previous close of 1,392p. There may be some concern regarding regulatory drag in the UK and Germany, as well as online EBITDA dipping by 8%, but on the whole, Entain is a company seemingly on the up.
It managed to strengthen its position in the US via its JV with MGM Resorts, BetMGM, and currently holds a market leader position for igaming at 29%. CFO Rob Wood told EGR Intel he was concentrating on chipping into FanDuel’s lead in online sports betting throughout 2023, with the group looking to level the playing field in terms of product offering.
The group’s share price continued to dip, landing at 1,243p on Monday 13 March before diving even deeper to close out at a then monthly low of 1,194p on Wednesday 15 March. The news the operator is set to acquire New Zealand esports betting supplier Sportsflare a day earlier did little to appease the market. The $13.25m deal will see Entain bolster its Unikrn offering, which soft-launched in Brazil and Canada (excluding Ontario) in Q4 2022.
Although there were some slight green shoots of share price recovery, Entain was unable to return to its monthly high of 1,399.50p on Tuesday 7 March. Confirmation it had been chosen as the strategic partner to TAB NZ on a 25-year contract late in the month failed to spark a reaction among investors as the firm’s share price petered out, down some 7% since the start of the month.
Flutter Entertainment
1 March closing: 13,490p
31 March closing: 14,635
Peak March closing: 14,665p
Bucking the trend of its London-listed rivals, Flutter saw its share price creep up in March as it returned a 22% increase, on a constant currency basis, in group revenue to £7.6bn during 2022 and set its sights on a secondary listing of its ordinary shares in the US.
Although the Dublin-headquartered giant cemented itself as the leading light in the gambling world on Thursday 2 March with its full-year results, its share price took a while to kick into gear. A close of 13,330p on results day was slightly down on the previous day’s performance, but the following week saw the group’s stock jump significantly.
The news of Flutter battling back against allegation of illegally operating in Austria and the confirmation of a $4m settlement with the US Securities and Exchange Commission (SEC) over alleged violations of international bribery laws in Russia relating to The Stars Group did little to abate its rise.
In fact, Tuesday 7 March saw Flutter’s stock hit 14,250p on the day it was reported it had settled up with the SEC.
A slight dip in mid-March followed before the group’s share price rebounded to a monthly high of 14,320p. The final week of March saw Flutter’s stock tick up again after the operator confirmed it had held “very strong support” from its shareholders regarding a listing in the US.
The firm is set to put a formal resolution to shareholders at its upcoming AGM on 27 April following positive initial discussions.
The resolution will require approval of 75% of the votes cast by Flutter shareholders.
Should the resolution be approved, Flutter will aim to implement the additional US listing during Q4 2023. The operator also confirmed that the proposal for a secondary listing included the option to pursue a primary US listing in the future.