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Entain swings to profit following stateside venture

Entain’s joint venture in US has 18% market share of live markets

Entain (LON:ENT), the owner of Ladbrokes, swung to a profit during 2020 as growth from its venture into the US market reaped higher sales.

Following a loss of £131.2m in 2019, Entain posted a profit of £113.8m for 2020.

The FTSE 100 company saw its revenue remain steady at £3.5bn, as earnings rose by 10% to £862.1m.

BetMGM, Entain’s joint venture with MGM Resorts, is now live in 12 states, and the company’s market share of live markets is up to 18%.

Harry Barnick, Senior Analyst for leisure sector companies at Third Bridge, commented on Etain’s reliance on growth in the US:

“Growth in the US is fundamental to Entain’s long-term future. This increasingly competitive market has outperformed expectations and is the key growth pillar for the group,” Barnick said.

The board announced in the financial statement that a dividend would not be paid, as it did not consider it a “prudent” measuring with the ongoing uncertainty caused by Covid-19. In 2019 Entain paid a dividend of 17.6p per share.

Entain’s share price is down 2.05% on market opening on Thursday to 1,431p per share.

Jette Nygaard-Andersen, chief executive at Entain, commented on the results:  

“Having spent more than two decades working with digital companies using technology to transform and disrupt industries, I am hugely excited about the future prospects for Entain.  We are a digital entertainment company with a clear strategic focus on growth and sustainability.  As such, we have a fantastic platform from which to use our proprietary technology to expand into new markets and reach new audiences around the world.”

“Today’s results demonstrate the extraordinary resilience and professionalism of our people, as well as the importance of having a truly diversified business model that is not overly reliant on any one product, brand, territory, or channel.  Furthermore, we firmly believe that the launch during the year of our Sustainability Charter, which includes our game-changing Advanced Responsibility & Care player protection programme, will be a key component in helping us to deliver on our vision of being the world-leader in sports-betting and gaming entertainment.”

“The strong underlying momentum within our business, the rapid growth of our US joint-venture, and our continuing international expansion mean that we are as confident as ever in the long-term prospects for Entain.”

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