Ladbrokes Coral owner: online growth hit by affordability measures and economy

Shares in the owner of Ladbrokes and Coral have fallen sharply after the company revealed it expected online revenues to be flat this year after being hit by the effect of tougher economic conditions and affordability measures.

In a trading update issued on Thursday morning, Entain reported its online net gaming revenue (NGR) was down by seven per cent for the first half of the year.

Entain said its performance continued to reflect "the implementation of tighter affordability measures in the UK", which it has made in anticipation of the government's gambling review, as well as its withdrawal from the Netherlands market and "tough" comparitives with 2021 driven by Covid lockdowns.

The company also said a "weaker macro-economic environment is reducing customers' rate of spend, moderating overall online growth versus our previous expectations".

In updated guidance, Entain warned full-year online NGR would be flat year-on-yearbased on the current outlook, excluding any impacts from the upcoming gambling review in Britain.

Overall group NGR was, however, up 18 per cent for the first half of the year, while Entain said trading in the company's retail estate was "ahead of expectations", with volumes in the second quarter ahead of pre-Covid levels driven by gaming and self-service betting terminals.

The company reported a record level of active customers in the second quarter of 2022, up 60 per cent compared with the same period in 2019.

Entain said its joint venture BetMGM in the United States continued to perform strongly and was established as the number two operator with a 24 per cent market share where it operated, outside the state of New York.

It claimed BetMGM was on track for full-year NGR of more than $1.3 billion (approx £1.09bn) and reiterated its expectation to reach positive earnings in the US during 2023.

Entain chief executive Jette Nygaard-Andersen

Chief executive Jette Nygaard-Andersen said: "I am very pleased to see that more customers are choosing to play with us, reflecting our focus on recreational players and putting the customer at the heart of everything we do.

"The macro-economic outlook is uncertain. However, the underlying performance of our business remains strong.

"With an increasingly recreational customer base and relatively resilient revenue, we remain confident our customer focus, diversification and proven ability to grow organically and through M&A will enable us to deliver further progress against our strategy."

Entain's share price was down nearly ten per cent at 1,027p by Thursday afternoon.

Analysts at Shore Capital said in a note that the update was "slightly worse than expected" but that there would be some mitigation from the improving situation in retail.

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