Online momentum and betting shop recovery help Entain to grow profits in 2021

A ninth successive year of double-digit percentage growth online along with a better than expected recovery from the impact of Covid-19 by retail betting contributed to Entain unveiling increased profits in its 2021 results on Thursday.

The owner of Ladbrokes and Coral said online net gaming revenue (NGR) was up 12 per cent at £3.06 billion, while online underlying earnings were up 12 per cent at £899 million, reflecting double-digit growth in all Entain's key markets excluding Germany and the Netherlands where it had faced new regulatory regimes.

Total group revenue of £3.83bn was up eight per cent, while profit after tax rose to £275.6m from £113.8m. Underlying operating profit did however fall nine per cent to £484.1m from £529.5m.

Entain said its retail division had performed well with business returning to more than 90 per cent of pre-Covid levels, although total retail net gaming revenue was down seven per cent while underlying earnings of £66.9m were £31.4m behind the previous year.

Nevertheless, the recovery in retail – Entain had 2,580 betting shops in the UK at the end of 2021, down 265 on the previous year – had surprised even Rob Wood, the company's chief financial officer and deputy chief executive.

He said: "I always thought we would rebound well once shops reopened post Covid but I couldn't have imagined we would get to where we have got to.

"We all know that retail footfall has fallen significantly yet our shops are within five per cent of where they were [pre-Covid]. And in parallel we have seen fantastic growth online. We've managed to almost get retail back where it was while also growing online really significantly."

However, there was a sting in the tail for racing, as betting over the counter on the sport has not bounced back as quickly.

"Gaming is doing the best and that is up versus pre-Covid," Wood said. "Self-service betting terminals are also showing growth as we are able to offer so many more products and betting opportunities and a more digital experience in-shop.

"But there's no doubt that over-the-counter is subsiding and it's mostly the traditional products, I'm afraid, horseracing and greyhound racing in particular. That's where the declines are."

Entain said it would pay back the £44m it received in 2021 under the government's furlough scheme, which had helped keep 14,000 retail staff on full pay during the pandemic. However, the £57.5m it received in 2020 will not be repaid.

Entain hopes its US joint venture BetMGM can take the number one spot

In the fast-growing US market, Entain's joint-venture BetMGM recorded NGR of around $850m in 2021, up nearly five times against the prior year.

Entain claimed BetMGM had established itself as the number two operator for sports betting and iGaming with a 23 per cent market share in the fourth quarter across the 21 markets in which it operates. FanDuel, the US arm of Paddy Power parent company Flutter Entertainment, holds the number one spot.

Wood said: "Challenging for number one is how we are thinking about it, so hopefully FanDuel are looking over their shoulders."

Entain chief executive Jette Nygaard-Andersen

Chief executive Jette Nygaard-Andersen said the results demonstrated "yet again that Entain is a business with growth built into its business model".

She added: "Our strong performance is underpinned by the Entain platform which encompasses the compelling combination of our proprietary technology, our outstanding people around the world, and our industry-leading operational capabilities.

"It is this unique platform that enables us to deliver an ever-improving customer experience, to embrace emerging consumer and technological trends, and to grow into new markets and product areas."

Entain's share price rose initially on the back of the news but it fell back to be down 7.5 per cent at 1,552.5p on Thursday afternoon.

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