Shares in global sports betting and gaming entertainment company Entain (ENT) increased full-year profit expectations as recovery kicks-in faster than anticipated.
The company now expects 2021 EBITDA (earnings before interest, taxes, depreciation, and amortization) to be between £875 million and £885 million, at the upper end of the prior guidance of between £850 million and £900 million.
Fourth quarter digital revenues were ahead of expectations, despite being down 6% in constant currencies on the prior year due to tough comparatives.
Investors initially welcomed the news, pushing the share price up around 1% to £17.28, although its has since fallen back to flat at £17.095.
US MOMENTUM AND RETAIL RECOVERY
US joint-venture partner BetMGM continued to perform strongly and generated full-year revenues of $850 million, up nearly five times and around $50 million ahead of prior guidance.
The brand was the number two operator across sports and iGaming (online gambling) in the three months to November retaining a 24% share of the markets where it operated while iGaming leadership was maintained at 30%.
The company expects net revenues to reach $1.3 billion in 2022, up from $1 billion previously guided and anticipates reaching positive EBITDA the following year.
Full year retail net gaming revenues fell 3%, impacted by restrictions, but with most shops open in the final quarter, revenues grew 62% year-on-year in constant currencies with volumes returning to within 10% of pre-pandemic levels.
ANALYST UPGRADE
Leisure analyst Greg Johnson at Shore Capital upped his EBITDA forecast by 2% to £880 million and maintained his buy rating.
He commented: ‘even allowing for a potential drag from UK gaming regulation, we see the potential for material value accretion going forward, including broadening geographic diversification (UK accounts for c30% of digital revenues ex US), structural global growth and further consolidation.’