Entain feels the pinch of 2023 but customer base grows

Entain feels the pinch of 2023 but customer base grows

Entain feels the pinch of 2023 but customer base grows
Entain Group has presented its full-year results for 2023, reporting yawning losses, but was nevertheless able to close the books on a continued upward trend in active players and customer acquisitions, as the company seeks to consolidate market presence and grow its share of the gaming and sports betting market. Loss after tax stood at £879m at the end of the financial year, compared to only £32.9m for the financial 2022. Part of this is ascribed to the HRMC case which cost the company £585m in settlement money and another £10m that is payable to the UK’s Crown Prosecution Service and the HMRC. The difficult spell is not yet over for Entain either, as the company expects more regulatory headwinds in 2024 which would very possibly suppress the company’s ability to generate a profit. Entain acknowledged the difficulty of the regulatory challenges so far and cautioned that more difficulties may lie ahead. In a statement, the company said: “During 2023, we managed regulatory changes in several of our larger markets, impacting our headline organic performance. The most notable were the implementation of ever-tightening UK affordability measures and the persistent lack of impactful regulatory oversight in Germany. We estimate the aggregate of regulatory impacts was a negative 6 percentage point headwind to Online NGR performance in 2023.” Meanwhile, the group also estimates the cost of this to be an additional £40m costs in regulatory pressure in 2024. The group reported a range of positive performance markers as well, including an 11% jump in net gaming revenue to £4.83bn which was driven by a 23% growth in online active customers. Online net gaming revenue itself increased by 12% to £3.43bn the company said, citing constant currency basis. Yet, even this figure had to be taken with cautious optimism as the pro forma results actually showed a 3% decline over the period. The company also managed to see growth in its retail sector, and the BetMGM venture did well even though it had been steadily losing ground in the US iGaming market for one. Although retail did fairly well, the company also faced increased operating expenses tied to the vertical, standing at £606m. The numbers have been taken in stride by the company’s top brass, and Chairman Barry Gibson has called the year one of the necessary changes, which will ultimately lead to positive results and a better outlook for the company. As to Entain Interim CEO Stella David, she acknowledged the challenges that the company had faced but also noted that Entain was able to drive growth across certain verticals and areas, and not least customer acquisition. However, even David acknowledged that the earliest the company would be able to return to better days is 2025. David took over the reins from Jette Nygaard-Andersen, the former CEO, who stepped down last year in the fallout of the HMRC settlement. Image credit: Unsplash.com

08 MAR 2024

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