Interactive Investor

ii view: Ladbrokes owner Entain hails record customer numbers

18th April 2023 11:34

Keith Bowman from interactive investor

With exposure to sporting events including the Super Bowl and brands including Ladbrokes, bwin, Gala and PartyCasino, we assess prospects. 

First-quarter trading update to 31 March

  • Total group Net Gaming Revenue (NGR) up 15%
  • Online NGR up 16%
  • Retail NGR up 14%

Chief executive Jette Nygaard-Andersen said:

"2023 is off to a strong start, with continuing underlying momentum across our operations around the world. 

“Looking ahead, we remain confident that our customer focus, diversification and proven ability to grow organically and through M&A will enable us to demonstrate further progress against our strategy."

ii round-up:

Sports-betting and gaming company Entain (LSE:ENT) today flagged a strong start to 2023, fuelled by a 19% jump in active online customer numbers to a new record and continuing growth for its US 50/50 joint venture with MGM Resorts under the BetMGM brand.  

The owner of brands including Ladbrokes, Coral and Sportingbet reported overall growth in net gaming revenue (NGR) of 16% for the first quarter, broadly matching City expectations, but with further growth for BetMGM potentially underpinning a moderate upgrade to full-year expectations. 

Shares in the FTSE 100 company rose by more than 2% in UK trading having come into this latest announcement down by 16% over the last year. William Hill owner 888 Holdings (LSE:888) has fallen by 66% over that time, while shares for major US operator and owner of Paddy Power, Flutter Entertainment (LSE:FLTR), are up almost 75%. 

Entain operates both online and on the high street, with licenses in over 40 regulated or regulating markets globally. 

NGR at its joint US venture BetMGM business rose 9% from the previous quarter, keeping its record of sequential growth since the start of 2021 and fuelling City hopes of a full-year sales beat as it continues to open further operations in new US states throughout the year.

Quarterly NGR at the high street operations such as Ladbrokes and Coral rose 14% year-over-year, with sales online and including such brands as CasinoClub and Foxy Bingo growing 16%.  

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares following the update, highlighting an estimated fair value price target of 2,020p.  
ii view:

Formerly known as GVC Holdings, Entain today employs over 23,000 people. During its last full financial year, the UK generated its biggest slug of sales at almost a half, followed by Italy and Australia each at just over a tenth, the balance of Europe at close to a quarter, and the rest of the world at just under a tenth. In 2021, Entain rejected an $11 billion all-share offer from BetMGM co-partner MGM Resorts International (NYSE:MGM) on the grounds that it significantly undervalued the company. 

For investors, a cost-of-living crisis both in the UK and overseas is now likely eating into free cash customers  have available for gambling. The issue of problem gambling and addiction has not gone away, tighter gaming regulations therefore remain a threat, while an estimated price/earnings (PE) ratio above the 10-year average suggests the shares are not obviously cheap.  

On the upside, a diversity of brand names, products, and geographical markets are owned, including a joint venture in the US. Bolt-on acquisitions continue to be made including its recent purchase of sports media business 365scores for up to $160 million, while the dividend is resumed following suspension during the pandemic, with the shares offer a prospective dividend yield of 1.4%. 

On balance, and while share price volatility across the sector warrants some caution, a consensus estimate of fair value at over £18 per share looks to reflect recent performance and growth potential in an expanding industry. 


  • Diversity of business type and geographical locations
  • Exposure to the USA


  • Uncertain consumer outlook
  • Potential for increased regulation

The average rating of stock market analysts:


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