Entain shares gained 5.1% to 1,375.8p in early morning trading on Thursday, after the gambling company reported a 19% revenue climb to £2.1 billion in HY1 2022, alongside an 18% growth in net gaming revenue.
The gaming firm said its revenue increase was driven by a strong rebound in retail performance after Covid-19 lockdowns last year, which sufficiently offset its fall in online revenue.
“The resurgence of in person betting continued over the first half as a cost-of-living crisis and broader economic uncertainty don’t seem to be deterring players from heading out for a rush of in person gaming,” said Hargreaves Lansdown equity analyst Matt Britzman.
“The flip side of that trend is a drop in online gaming, though importantly activity’s stabilising well ahead of pre-pandemic levels.”
Entain confirmed a 31% growth in operating costs on retail reopening and new acquisitions, which fed into the cost base.
However, the betting group confirmed a 17% EBITDA climb to £471 million.
Entain commented it was on track to deliver on its FY 2022 profit guidance of £925 million to £975 million.
The company also noted its new dividend policy, including a total dividend of £100 million to be paid in FY 2022. The dividend will be split in half, representing an 8.5p per share payout in HY1 2022.
“Positive performance and the rebound of retail has paved the way for a fresh and revitalised dividend policy. Starting at £100m over the current year, split between the first and second half, that’s expected to grow from here,” said Britzman.
“Good news for investors, though that will put added strain of cash that’s already being snapped up in BetMGM and the acquisition led growth strategy.”
“Speaking of BetMGM, the group’s joint venture over the pond, performance remains strong. Profits should start to flow at some point next year and BetMGM management have recently upped their forecast addressable market to around $37bn, there’s a big slice of pie up for grabs.”
