ii view: Ladbrokes firm Entain benefiting from overseas expansion

First-half results to 30 June

• Net Gaming Revenue (NGR) rose by 7%
• Adjusted profit (EBITDA) up 11% to £583 million
• Operating loss of £146.7 million, improved from a loss of £157 million
• Interim dividend up 5% to 9.8p per share 
• Net debt including lease liabilities up 6% from late December to £3.55 billion

Guidance:

• Now expects full year adjusted profit of between £1.1 billion to £1.15 billion, potentially up from 2024’s £1.089 billion
• BetMGM targeting $500 million of adjusted profit (EBITDA) over the coming years

Chief executive Stella David said:

"I am delighted by the ongoing momentum and strong performance that both Entain and BetMGM have delivered in H1 2025. Entain's transformation journey is well underway, gathering pace and is supported by our high-quality portfolio of iconic brands with podium positions in attractive markets. 

"Our business is getting stronger, fitter and faster, with these results reinforcing our confidence in driving sustainable underlying growth and generating more than £0.5bn of cash annually in the medium term."

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ii round-up:

Sports-betting and gaming company Entain (LSE:ENT) operates both online and via the High Street.  

Entain’s sporting related betting brands include Ladbrokes, Coral, bwin and Sportingbet. Gaming related brands take in CasinoClub, Foxy Bingo, Gala and PartyCasino. 

The FTSE 100 company also operates in the USA via a 50/50 joint venture with MGM Resorts International (NYSE:MGM) and under the brand BetMGM brand, as well as in more than 30 other markets across the world. 

For a round-up of these latest results announced on 12 August, please click here. 

ii view:

Tracing its Ladbroke Coral history back to 1886, the former GVC Holdings today employs over 24,000 people. Excluding the US business, online adjusted profits generated 78% of the total during this latest period with retail, or high street profits the balance of 22%. A constituent of the FTSE 100 index, Entain's rivals include Paddy Power owner Flutter Entertainment (LSE:FLTR) and William Hill owner Evoke (LSE:EVOK).

For investors, adverse sporting results hindering profit margins can impact. Problem gambling for some customers and a potential tightening of government regulations and increased taxes should not be forgotten. Intense competition at its joint venture BetMGM business includes rivals such as DraftKings and Flutter business FanDuel, while a share price-to-net asset value ratio above the three-year average may suggest the shares are not obviously cheap.

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To the upside, geographical diversity includes exposure to the UK and Ireland, parts of Europe, Australia, Brazil, Canada and the USA via BetMGM. Profit progress at its part-owned BetMGM business is being made. An ongoing efficiency programme leaves it on track to generate annual savings of at least £100 million from 2026, while a forecast dividend yield of around 2.3% compares to no payout at major rival Flutter.  

On balance, and while risks remain, a consensus analyst fair value estimate above £11 per share might interest investors  considering this experienced and increasingly international betting company.

Positives: 

• Diversity of business type and geographical locations
• Paying a dividend (not guaranteed)

Negatives:

• Uncertain consumer outlook
• Potential for increased regulation

The average rating of stock market analysts:

Buy