Shares in Ladbrokes parent tumble 13% as online revenue softens 

The slump left the stock about 60% below a record high reached in 2021

Ladbrokes owner Entain reported a 'softening' in online revenue and cited adverse sports results, safer gambling measures, and slower growth in Australia and Italy.

Shares in Ladbrokes owner Entain ended 13% lower following a warning of a sales slowdown and fading takeover speculation for the company.

London-based Entain said it had seen a “softening” in online revenue since the summer and cited adverse sports results, safer gambling measures, and slower growth in Australia and Italy.

The slump, which briefly triggered a trading halt due to volatility, left the stock about 60% below a record high reached in 2021, when covid lockdowns spurred a jump in digital gambling.

Buyout speculation cools

A cooling of buyout speculation has also weighed on the shares, with analysts previously highlighting potential for a second bid from joint venture partner MGM Resorts International. 

“We sense confidence around the prop of a further MGM approach has ebbed in recent weeks,” Jefferies analyst James Wheatcroft wrote in a research note. He added that Entain’s trading update implies a cut to consensus earnings expectations of as much as 5%.

Rivals Flutter Entertainment — owner of Paddy Power — and William Hill parent 888 Holdings fell 3.3% and 7%, respectively. French lottery operator La Francaise des Jeux also declined.

Entain also owns online brands Bwin and Partypoker. It said it expects third-quarter online net gaming revenue to be down by “high single digit percent” on a pro-forma basis. It also expects group online revenue for the full year to be down by “low single digit percent”. The company had earlier forecast annual growth in the low to mid-single digits.

• Bloomberg and Reuters