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Entain, the parent company of Ladbrokes and Coral, said its strategic review has concluded it has “the appropriate portfolio” of brands, skills and geographies to “deliver high-quality, long-term growth”, but it will consider alternatives for its Georgia-based Crystalbet.
The board of directors' capital allocation committee cited “significant upside” potential by focusing on its strategy of “returning to organic revenue growth, expanding margins and winning in the US”.
The review, launched in January, came in response to investor pressure that suggested that the London-listed company had made too many acquisitions at high prices.
Its shares had declined 49 percent over the past 12 months, as of closing on Monday (May 20).
But Entain today (May 21) said its balance sheet and leverage capacity are “robust” and have been strengthened by a recent extension of its revolving credit facility repricing of term loans.
The committee cited double-digit second-quarter revenue growth in Brazil, aided by improved player acquisition and retention facilities, plus the “leveling of the playing field” in the UK, brought about by a new industry code on safer gambling checks and pending industry-wide slots limits.
In the US, its BetMGM joint venture launched new Major League Baseball and NBA betting products with new parlay options, the company said.
Its application was just approved by the Nevada Gaming Commission without limitations.
The company’s operations in central and eastern Europe are “performing well”, and the outlook for approval of online casinos in Poland is “increasingly encouraging”, the company said.
Last year, activist investors began pressuring Entain as shares slumped, saying nearly a dozen acquisitions under former chief executive Jette Nygaard-Andersen were not paying off sufficiently.
One target for criticism was its raising of equity to help pay for a £750m takeover of Poland’s STS.
The company has already received interest from potential acquirers of Crystalbet, Entain said today.
“Whilst we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy,” chairman Barry Gibson said.
“The group has the core strengths, brands and products to be competitive across its markets and continues to be a global leader in betting and gaming,” he said.
The board will update the company’s progress in its interim earnings report in August, the company said.
