Ladbrokes owner increases forecast amid England Euros boost
Entain’s £2 billion bid for Australia’s Tabcorp was turned down earlier this week.
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Your support makes all the difference.Entain shareholders woke up to a double boost on Thursday as the company increased its forecast and is likely to benefit from England’s appearance in the final of the Euro 2020 tournament.
The Ladbrokes owner said it has seen a strong performance online, which offset the impact of the company having to close shops during much of the last six months.
Net gaming revenue rose 11% in the first half of 2021, including a 42% rise in the second quarter of the year.
As a result, Entain’s bosses expect that Ebitda (earnings before interest, tax, depreciation and amortisation) will reach between £850 million and £900 million this year.
It is well above the £816 million that some analysts had predicted and the news helped push shares up by around 1.8% on Thursday morning.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown said: “Shop closures acted as a chain around the group’s ankles in the first quarter. However, add in a strong retail rebound in the second quarter, and a stellar – much higher margin – online business, and the overall half-year picture looks quite bright indeed.
“England’s semi-final victory will be a double cause for celebration in the Entain offices. An appearance in the final is an open goal for the group, and will be a boon for sports wagers.
“England’s long run in the tournament may well have been a contributing factor to the news that underlying cash profits are expected to beat consensus at the full year.”
Earlier this week, Entain’s nearly £2 billion bid for Australia’s Tabcorp was turned down by the company.
Analysts at Jefferies said some investors had feared Entain was trying to swallow a poison pill by acquiring Tabcorp.
By making the company too big, it might have put off a new bid from US casino giant MGM which approached Entain in January about a possible multibillion-pound deal.
After the deal fell through, MGM was banned under takeover rules from making another approach for six months. That period will come to an end later in July, leaving it free to make a fresh offer if it wants.
High street bookmakers have reopened in recent weeks, but Entain’s shops are still trading around 10% below their pre-pandemic levels. However, this is “consistent with expectations”, said Shore Capital Markets analyst Greg Johnson.