- Half-year net gaming revenue rose 11%, ignoring currency effects, to £2.4bn
- Underlying operating profit up 25% to $307.4m
- £585m provision set aside for HMRC’s investigation into the legacy Turkish business
- Proposed interim dividend of 8.9p per share, +5% year on year
Entain Prepares For A Settlement Over The Bribery Investigation
Let’s address the elephant in the room first, Entain PLC (LON:ENT)’s set aside £585m today in preparation for a settlement over the bribery investigation that’s been lingering in the background.
The business in question was sold over 6 years ago by a former management team, so drawing a line under this and moving on is something the new team, and investors, have been keen to do. But nonetheless, this entire set of events highlights why governance is so important and shines a spotlight back on a sector that’s come under scrutiny plenty of times in the past.
Back to the day to day, punters are continuing to allocate a portion of their dwindling disposable income to one of Entain’s host of big branded outfits, from Ladbrokes to Coral. The online business delivered record numbers of active customers and the in-person retail business put in a strong showing despite comparisons getting tougher.
BetMGM, the joint venture in the US, continues to be a beacon of light and a hugely important asset for future growth. Profits came over the second quarter for BetMGM, an inflection point for the business that’s now on a path to delivering long term cash profit margins in the region of 30-35%.
There are headwinds though, tighter affordability measures in the UK aiming to keep users from splashing all their hard-earned cash away are keeping a lid on things, as is the ongoing environment in Germany where regulation is poorly enforced.
Article by Matt Britzman. Equity analyst at Hargreaves Lansdown
