Entain alleviates COVID-19 setbacks by going international
Entain Plc has been back on track with operations after many attempts to recover from the setbacks brought on by the ongoing COVID-19 pandemic. The company has been working on expanding into new regulated markets, as well as focusing on online betting for the time being.
The group published its 2020 full-year results and revealed revenues of £3.56 billion, which is not much of a difference from the £3.57 billion it saw in 2019. The company’s underlying EBITDA grew from £761.4 million to £843.1 million. This growth has mainly been caused by the company’s growth in its online division.
In the meantime, the group unveiled its profit after tax to be £113.8 million, which is quite a nice change from the massive £131.2 million loss it witnessed in the previous year. Its online portfolio revenue also grew by 27%, going from £2.1 billion to £2.68 billion. Aside from that, sports NGR also increased by 24%, and scored 5% growth in the amount of sports wagers that were placed.
Entain’s online gaming division’s NGR saw incredible growth in 2020, with a rise of 29%. The group also witnessed a stronger performance in Q2, since that was around the time the pandemic hit with full force and countries were forced to go into lockdown for months on end, causing live sports to be halted.
Entain’s new CEO Jette Nygaard-Andersen noted:
“Having spent more than two decades working with digital companies using technology to transform and disrupt industries, I am hugely excited about the future prospects for Entain. We are a digital entertainment company with a clear strategic focus on growth and sustainability. As such, we have a fantastic platform from which to use our proprietary technology to expand into new markets and reach new audiences around the world. Today’s results demonstrate the extraordinary resilience and professionalism of our people, as well as the importance of having a truly diversified business model that is not overly reliant on any one product, brand, territory, or channel.”
Even though Entain’s online brands saw pretty decent success, the pandemic still had negative impacts on the company’s retail activities, which is quite evident in the £1.7 billion net debt that came up in the report. Naturally, this was the part that was most affected since lockdown made all betting shops and in-person venues shut down completely for a majority of 2020.
During the year, total retail revenues witnessed a 40% hit, going from £1.4 billion to £857.1 million. Retail NGR in the UK was at £678.6 million, a 40% decrease from 2019, again caused by the COVID-19 pandemic. The impacts brought on by the pandemic were also noticeable in the full year retail EBITDA, which was £98.3 million, a huge decrease from 2019’s £274.3 million.
Despite this loss, Entain has been turning its focus on the international markets as it reported successful performance in its operation in Georgia, Italy, Brazil and Australia particularly. Even though it experienced first-hand the horrible setbacks of the pandemic, the company is still expanding into new regulated markets as it recently entered Colombia through bwin and took over bet.pt, the Portuguese bookmaker.
Moving on, the company is now trying to obtain Enlabs AB, since it is looking to expand into the Baltic scenes. The company is clearly dedicated to operate in regulated markets only, since by December of 2020, it had seen 99% of NGR come in from regulated markets, or markets soon to be regulated.
But since the pandemic’s end is still nowhere in sight, and there is still some uncertainty surrounding the consequences of the pandemic, Entain’s board decided not to pay dividends right now. Even though the board decided this, it still stated that it understands the importance and value of these dividends for their shareholders, and mentioned that the company will be looking into making these payments depending on what happens over time. 2019’s dividends were 17.6%.
Furthermore, the company is also dedicated to providing safer environments for players, and announced the launch of the £100 million Entain Foundation which is working on providing support and research for safer gambling.
Nygaard-Andersen concluded her statement by saying:
“We firmly believe that the launch during the year of our Sustainability Charter, which includes our game-changing Advanced Responsibility & Care player protection programme, will be a key component in helping us to deliver on our vision of being the world-leader in sports-betting and gaming entertainment. The strong underlying momentum within our business, the rapid growth of our US joint-venture, and our continuing international expansion mean that we are as confident as ever in the long-term prospects for Entain.”