Gambling operator Entain on Thursday said it will pay an interim dividend as the Ladbrokes betting chain owner diversified into Europe.
For the six months to June 30, net gaming revenue was £2.12 billion, up 18% from £1.79 billion a year before, and revenue was £2.09 billion, up 19% from £1.77 billion.
Underlying Ebitda was £471 million, up 17% from £401.1 million. Pretax profit was £39.5 million, down 70% from £130.6 million last year.
Turning to returns, Entain said it was implementing a new dividend policy. It is proposing a progressive dividend, starting with a total dividend of £100 million for 2022, to be paid to shareholders in equal instalments in respect of the first half and annual results. Entain declared an interim dividend of 8.5 pence per share.
Looking ahead, Entain said 2022 Ebitda is expected to be in the range of £925 million to £975 million, in line with current consensus. Entain noted the economic environment remains ‘uncertain in many of our markets’, but it remains confident that its customer focus, increasing diversification and ability to deliver growth will deliver further progress for stakeholders.
Shore Capital said the Entain interim results were slightly ahead of expectations, while its forecast is in line. The broker said it expects to maintain its full-year estimates for Entain, suggesting a second half broadly similar to the first. It expects more progress for the company next year as headwinds dissipate.
Shore kept its ’buy’ rating on the stock.
Separately, Entain said it has partnered with EMMA Capital, an investment firm based in the Czech Republic, to establish a new venture, Entain CEE, to drive expansion in Central and Eastern Europe.
Entain will own 75% of the economic rights in Entain CEE, with EMMA Capital owning the other 25%. Entain CEE will acquire the SuperSport Group, the gaming and sportsbook operator in Croatia from EMMA for €600 million in cash at completion.
Entain shares were up 2.1% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 7,501.58
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Hang Seng: up 2.1% at 20,013.96
Financial markets in Japan closed for Mountain Day holiday
S&P/ASX 200: closed up 1.1% at 7,071.00
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DJIA: closed up 535.10 points, or 1.6%, at 33,309.51
S&P 500: closed up 2.1% at 4,210.24
Nasdaq Composite: closed up 2.9% at 12,854.80
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EUR: down at $1.0294 ($1.0349)
GBP: down at $1.2207 ($1.2253)
USD: up at JP¥132.98 (JP¥132.41)
GOLD: down at $1,784.55 per ounce ($1,799.85)
OIL (Brent): up at $97.58 a barrel ($94.77)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday’s key economic events still to come
Japan Mountain Day holiday. Financial markets closed.
1000 CEST France IEA oil market report
0930 BST UK Finance publishes latest quarterly data
1100 BST Ireland consumer price index
0830 EDT US producer price index
0830 EDT US unemployment insurance weekly claims report
1030 EDT US EIA weekly natural gas storage report
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Energy bosses will face pressure from UK government ministers about how they can help customers cope with rising bills at a crunch meeting on Thursday. Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng will press gas and electricity company executives for solutions to the predicted spike in bills over winter. The summit with utilities bosses, expected to take place in Downing Street, comes after Cornwall Insight predicted bills are set to soar to around £3,582 in October, from £1,971 previously, before rising even further in the new year. Executives are being asked to submit a breakdown of expected profits and payouts, as well as investment plans for the next three years. Former prime minister Gordon Brown has suggested scrapping the price cap and negotiating lower rates with energy bosses, according to reports. Tory party leadership contenders Rishi Sunak and Liz Truss continue to face questions about what they will do to help struggling families, while Labour has called for a ‘loophole’ in the oil and gas windfall tax to be closed to raise more support cash.
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BROKER RATING CHANGES
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Goldman Sachs starts Harbour Energy with ’buy’ - price target 609 pence
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Goldman raises Ferguson price target to 13,750 (13,500) pence - ’buy’
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COMPANIES - FTSE 100
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Coca-Cola HBC said it achieved strong interim results in the face of macroeconomic and geopolitical uncertainty and expects to generate positive organic revenue growth for 2022. However, it took a hit to leave Russia. For the six months to June 30, net sales revenue was €4.21 billion, up 30% from €3.25 billion last year, and net profit was €152.9 million, down 34% from €233.1 million. During the period, the soft drinks bottler incurred non-cash charges of €188 million and cash charges of €2 million, predominantly related to its withdrawal from business in Russia. Coca-Cola HBC expects to incur further charges in the second half, currently estimated at €82 million. Looking ahead, it reinstated guidance for 2022 and expects to generate comparable earnings before interest and tax in the range of €740 million to €820 million. Comparable Ebit was €462.5 million in the first half, up 32% from €350.3 million a year before.
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Antofagasta slashed its interim dividend as lower copper prices dented the Chilean miner’s interim results. For the six months to June 30, revenue dropped 30% to $2.53 billion from $3.59 billion a year before, due to lower copper and by-product sales volumes and lower realised copper prices. Earnings before interest, tax, depreciation and amortisation fell 48% to $1.24 billion from $2.36 billion, and pretax profit was down 62% to $679.6 million from $1.79 billion. The miner declared an interim dividend of 9.2 US cents, down 61% from 23.6 cents paid out last year. Looking ahead, Antofagasta reiterated 2022 copper production is expected to be 640,000 to 660,000 tonnes. Turning to its growth projects, Antofagasta said that following the completion of a detailed review of the Centinela second concentrator project, the capital cost estimate has been revised to $3.7 billion, up from $2.7 billion in the 2015 pre-feasibility study. The decision on whether to proceed with the project is scheduled for early 2023, Antofagasta added.
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COMPANIES - FTSE 250
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Industrial tread maker Coats Group said it raised £92 million from the placing of 144.6 million new shares at 63.5 pence per share by Citigroup and Peel Hunt. Retail investors subscribed for a further 682,052 shares at the same price. The capital raise, representing 10% of outstanding shares prior to the raise, is to help pay for the €115 million acquisition of Rhenoflex, a maker of sustainable structural materials for the footwear industry. Both the share offer and the acquisition were announced on Wednesday after the London close.
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COMPANIES - DUBLIN
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Ryanair’s trademark €1 and €10 fares will not be seen for a ‘number of years’ due to soaring fuel prices, the budget airline’s boss said. In an interview with BBC Radio 4’s Today programme, Michael O’Leary said he expected Ryanair’s average fare to rise by about €10 over the next five years, from around €40 last year to roughly €50 by 2027. He told the broadcaster: ‘There’s no doubt that at the lower end of the marketplace, our really cheap promotional fares – the €1 fares, the €0.99 fares, even the €9.99 fares – I think you will not see those fares for the next number of years.’ Although the soaring fuel prices which are impacting the airline’s fares are also wreaking havoc on people’s disposable incomes, O’Leary is confident the number of customers will remain steady.
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COMPANIES - GLOBAL
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Zurich Insurance announced a share buyback, as it reported a 25% rise in half-year profit. In the six months that ended June 30, the Swiss insurer booked a business operating profit of $3.39 billion, up 25% from $2.71 billion a year previous. Diluted earnings per share rose 4.7% to fr.13.91 from fr.13.28. Growth was driven by an underlying improvement across all businesses, the firm explained, and is the highest since 2008. It was also the second highest ever reported. The company announced a share buyback of fr.1.8 billion, about $1.9 billion. Zurich said it is doing this to offset expected earnings dilution from the sale of its German life back book.
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German industrial conglomerate Siemens said it had made a significant net loss as it counted the cost of struggles at its former energy unit. Between April and June, Siemens recorded a net loss of €1.5 billion, after a mirror €1.5 billion profit in the same period last year. The loss was due to a €2.7 billion devaluation of the group’s ‘stake in Siemens Energy and Russia-related impacts totalling €0.6 billion’, Siemens said in a statement. Shares in Siemens Energy, which was spun off from its parent in 2020, have fallen around 25% since the start of the year. Siemens Energy has had to contend with the struggles of its own wind-energy subsidiary, Siemens Gamesa, which has struggled to turn a profit despite surging demand for renewable energy. Quarterly revenue at Siemens, which makes products ranging from trains to factory equipment, rose 11% year-on-year to €17.9 billion.
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Thursday’s shareholder meetings
Inspecs Group PLC - AGM
Marks Electrical Group PLC - AGM
Silver Bullet Data Services Group PLC - AGM
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