Ladbrokes owner eases earnings guidance as online revenues begin to fall

The owners of bookie chain Ladbrokes have tightened their annual earnings forecast due to a marked decline in online betting revenue in the final three months of last year.

The owners of bookie chain Ladbrokes have tightened their annual earnings forecast due to a marked decline in online betting revenue in the final three months of last year.

Ladbrokes owner Entain has tightened its forecast for annual earnings after seeing a marked decline in online betting revenue in the final three months of last year.

The group — which also owns online brands like Bwin and PartyPoker — said, in its latest trading update, that online revenues fell 9% in the fourth quarter of last year. It has lowered the expected upper end of profit expectation as a result.

Entain now expects annual core earnings of £875m-£885m (€1.05m-€1.06m) for 2021, having previously guided for a range of £850m-£900m.

The drop in online revenues followed a strong showing in the final quarter of 2020 and also nearly six years of double-digit percentage growth. 

However, Entain said the fall was not as steep as feared.

Takeover push

Entain — which was the subject of two takeover approaches last year, said its retail net gaming revenue surged 60% in the final quarter of 2021, with betting volumes at its more than 4,000 Ladbrokes and Coral outlets across the UK, Ireland, Italy, and Belgium within 10% of pre-pandemic levels. 

Overall net gaming revenue climbed 4%, it said.

The results were Entain's first after a year in which both US rival DraftKings and casino operator MGM made takeover approaches, though neither resulted in a deal.

The takeover interest came during a year of rapid growth for the online betting business during coronavirus lockdowns and as BetMGM — Entain's US online sportsbook joint venture with MGM — continued to gain market share.

Shares in Entain climbed 48% last year but have fallen 20% since DraftKings dropped its pursuit of the company in October. 

The stock was up slightly following the release of the latest revenue figures.

"We believe that (Entain's) share price fails to reflect BetMGM's increasingly strong position in the US and Entain's strong foundations for funding the expansion," analysts at Peel Hunt said.

Earlier this week, UK online gambling company 888 posted record annual revenues for 2021, helped by lockdown restrictions pushing some punters to online casino games, but also noted a slowdown in revenue growth in the final quarter of the year as restrictions eased.

888, which also offers sports betting on top of its casino games, reported a 14% rise in annual revenue. But, the easing of Covid restrictions and an exit from the Dutch betting market eased growth in the final quarter.

• additional reporting Reuters