Entain “optimistic and prudent” in Q1, as UK remains core growth driver
On an analyst call, which accompanied today’s trading update, the operator’s new full-time CEO Stella David said she was “optimistic but prudent” about Entain’s Q1 performance.
She said Entain had started the year well, but she wants to ensure it continues “in the right direction”.
Group NGR excluding the US BetMGM JV increased 6%, or 10% in constant currency. The update did not break down any of the specific revenue figures.
Overall revenue was bolstered by UK and Ireland online NGR increasing 22%. This, Entain said, was due to strong volume growth in the market, which it expects will be ahead of the market average for the period.
Are adult gaming centres enticing retail gaming customers away from betting shops?
Group online NGR was up 10%, while retail NGR recorded a 2% uptick. Although retail was bolstered by an increased sports margin, revenue was partially offset by lighter UK gaming volumes.
UK&I retail NGR dipped slightly by 1% due to “lighter volume”. Speaking to analysts, CFO Rob Wood said he expected the “softer results” in retail were due to changes to consumer behaviours.
He said in terms of gaming, double-digit online gaming growth across the UK suggested players were largely shifting to online. He also said he suspected adult gaming centres (AGCs), in arcades and amusements, were taking gaming market share.
“AGCs have flown under the radar and don’t have the same approach to monitoring players,” he told analysts.
Overall Wood said he was “largely happy” with how the retail business was trading.
Entain Q1: Brazil and CEE record double-digit growth
Looking beyond the UK, Brazil NGR jumped 31% during Q1, which marked the first full quarter of Brazil’s legal online betting market.
The operator said this was ahead of expectations and Wood noted there was no official market performance data from the regulator, which made it difficult to compare Entain’s position to its competitors.
“The environment doesn’t feel like wholesale change versus where we were pre-regulation,” he noted.
The CEE region also performed well with NGR up 10%. Entain noted Croatia had performed particularly well.
International revenue remained flat but increased 5% in constant currency. Australian NGR dropped 8% (in constant currency), reflecting customer-friendly sports results.
Sports margin increases, partly driven by Poland
Both Wood and David highlighted an increase in sports margin, which Wood said had risen to 14.9% in Q1.
“Over the course of a few years you do see a positive trend upwards, there are clearly structural growth drivers,” Wood said
“One is player mix as we’ve become more recreational. Poland is all sports, it’s a material part of our sports mix and it trends in the 20s.”
Also on sports, one analyst asked whether Entain would be utilising any of the tech being developed by its Angstrom business for BetMGM.
Wood said over this year, the focus for Angstrom would be entirely on the US. But he said he could see Angstrom’s role evolving over time.
BetMGM yesterday reported its net revenue increased 34% in Q1 to $443 million. This translated to adjusted EBITDA of $22 million, an improvement of more than $150 million from a loss in the first quarter of 2024.