Shares in Ladbrokes and Coral owner Entain (ENT) shot to the top of the FTSE 100 leaderboard on Thursday, gaining 1.9% to £18.40 after the company upped full year profit guidance.

After a strong second quarter the company said it now expected full year EBITDA (earnings before interest, taxes, depreciation, and amortisation) to be between £850 million and £900 million, ahead of current consensus.

The fresh guidance is 2%-to-8% higher than the average of analyst’s expectations of £833.3 million according to Refinitiv data, which probably means more upward tweaks from analysts.

GOOD MOMENTUM

The group has experienced positive trends since markets started to open with strong second quarter net gaming growth of 42%, marking the 22nd consecutive quarter of double-digit growth.

Sports and gaming have seen contrasting fortunes with online gaming suffering from tough year ago comparatives, restricting growth to 1% while sports betting was up 62% reflecting the limited sporting calendar last year.

Since retail stores opened in mid-April volumes have bounced back to within 10% of pre-pandemic levels. Belgium and Italy have a phased reopening from June.

STRONG US PERFORMANCE

The company said its US joint venture with MGM Resorts continued to perform strongly and generated net gaming revenues of $350 million in the first half.

Paul Leyland, analyst at Gambling consultancy Regulus Partners noted this was roughly double the revenues for the whole of 2020 and a six-fold year-on-year growth.

Leyland commented: This is clearly an impressive top-line performance and demonstrates the benefits of a long-term and competent focus on igaming, in which it has only one effective multi-market competitor currently.’

Gambling guru at Shore Capital, Greg Johnson said it appears that BetMGM is ‘well on its way’ to reaching its 2022 target of $1 billion in revenues and anticipates full year revenues in the current year to hit $700 million.

Johnson remains positive on the shares commenting that ‘although the group does face some regulatory hurdles (most notably in the UK), momentum remains strong and opportunities for further value accretion across both its core operations and BetMGM over the medium-to-long term’.

READ MORE ABOUT ENTAIN HERE

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Issue Date: 08 Jul 2021