- Entain reiterates guidance, sees US EBITDA positive in 2023
- World Cup and easier comps going into Q4
-Rank disappoints as inflationary pressures rise
Global sports betting and gaming company Entain (ENT) delivered third quarter net gaming revenues to 30 September in line with expectations.
Full year guidance was reiterated, and the company highlighted continued momentum going into the final quarter driven by easier comparisons and the football World Cup. Investors reacted positively with the shares marked up 3.5% to £11.26.
The shares are down 47% year to date while 2022 earnings estimates have fallen by around 25%. A normalization of online activity post pandemic and regulatory concerns have acted as a drag on the shares.
STRONG US PERFORMANCE
The standout performer was again the US operation BetMGM which grew revenues 90% year-on-year to $400 million and has generated over $1 billion in 2022, putting it on track to reach over $1.3 billion for the full year.
CEO Jette Nygaard-Andersen said ‘continued strong financial performance reiterates our confidence in reaching sustainable positive EBITDA during 2023.
‘In the US, BetMGM continues to be the clear leader in the iGaming market, and the successful start to the NFL season also highlights the strength of our growing US sports betting offer.’
Full year EBITDA (earnings before interest, taxes, depreciation, and amortisation) is expected to be in line with prior guidance of between $925 million to $975 million, representing between 5% and 10% growth.
RANK DISAPPOINTS
Casino and bingo operator Rank (RNK) saw its shares drop 8.5% to 58.4p on Thursday after lower customer spending and rising costs disappointed investors.
The shares have lost over 60% since the start of the year while analysts have revised down their 2023 full year earnings estimates by 64% since January.
While net gaming revenues for the three-months to 30 September grew 2% to £165.7 million, Grosvenor casinos revenues fell 5% as customers spend less.
Encouragingly, London saw a 20% increase in customers which drove 21% growth in net gaming revenues, but this was more than offset by a 17% decline outside of the capital where spending was weaker.
A bright spot was a 13% increase in digital revenues year-on-year to £48.9 million with good growth across the two UK businesses and the Spanish business Enracha.
Looking forward, the company highlighted increasing challenges from wage inflation, food input price increases and supply chain pressures. It said it remains focused on ‘initiatives that mitigate these cost pressures as much as possible’.
Greg Johnson, leisure analyst at Shore Capital, lowered his 2023 pre-tax profit estimate by 23% to £30 million but maintained his buy recommendation.
