Entain reaffirms outlook after robust first quarter

(Sharecast News) - Gambling and gaming group Entain reaffirmed its full-year outlook on Thursday, following robust volume growth through the first quarter. Updating on trading, the owner of Ladbrokes, Coral, Sportingbet, Foxy Bingo and Party Casino, among others, said group volumes grew by 8% on a constant currency basis in the three months to 31 March, while net gaming revenue (NGR) climbed 3%.

Online NGR increased 5%, after unfavourable sports results ate into volume growth of 10%. Retail revenues fell 3%, also affected by sporting outcomes.

Among individual geographies, NGR rose 6% in UK and Ireland and 1% in Entain's international market, helping to offset a 6% decline in central and eastern Europe.

Revenues at BetMGM, its 50:50 US joint venture with MGM Resorts, improved 6%.

Stella David, chief executive, said strong momentum seen at the start of the year had continued throughout the quarter.

She continued: "Our sharper focus and optimisation initiatives reinforce our conviction in delivering sustainable growth and improving cash generation. Entain remains well positioned to be a long-term industry winner."

Looking to the current year, the blue chip confirmed guidance for online NGR growth of between 5% and 7%, and said it "remains comfortable" with expectations for annual underlying earnings before interest, tax, depreciation and amortisation. Analysts are looking for EBITDA of between $300m and $350m.

As at 0930 BST, the stock was trading nearly 5% higher at 611.4p.

Shore Capital, which has a 'buy' rating on the stock, said: "Although we anticipate earnings per share to be broadly flat in the current year, with robust underlying growth offset by duty rises in the UK, we expect to see a return to growth from the 2027 full year, with EPS building towards 100p by 2030.

"We do not believe the current valuation fairly reflects the underlying momentum across the group, the longer-term structural growth potential and specifically its 50% stake in BetMGM."

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