Entain flags worries over consumer outlook as it posts higher earnings

Ladbrokes and Coral owner Entain has posted a 17% hike in half-year earnings, but cautioned it was “not immune” to the cutback in consumer spending amid the cost-of-living crisis.

The group – which also owns bwin and partypoker online brands – reported underlying pre-tax earnings of £471 million for the six months to June 30 as revenues lifted 19% to £2.1 billion.

Better-than-expected trading in its betting shops helped offset falling online gaming as the pandemic-fuelled boom began to wane, while it also said customers were beginning to cut their spend in the face of soaring cost pressures.

The group said: “The current economic pressures, increasing rates of inflation and increasing energy costs are a cause for concern for many consumers.

“Whilst the group considers itself as relatively resilient to the impacts of economic pressures, it is not immune.

“The directors continue to be vigilant of the economic backdrop.”

The comments came as Entain also unveiled a deal to drive growth in Central and Eastern Europe markets through a joint venture with Czech Republic-based investment firm EMMA Capital and snap up Croatia’s SuperSport Group.

Entain will pay 600 million euros (£506 million) in cash upfront to EMMA for a 75% economic stake in SuperSport, with the new joint venture to be called Entain CEE.

Half-year figures for Entain showed retail net gaming revenues jumped 244% year-on-year as punters returned to bookies now that Covid restrictions have lifted, but its online gaming revenues fell 7%.

Entain last month cut its full-year online gaming revenue outlook due to the weaker forecast for customer spend, predicting flat growth having previously guided for mid to high single figures range.

Reported half-year pre-tax profits dropped to £39.5 million from £130.6 million a year ago as its bottom line suffered from losses on foreign exchange and debt accounting.

Jette Nygaard-Andersen, chief executive of Entain, said: “While we remain vigilant to the consumer backdrop, our geographic and product diversity provides resilience which, together with our proven ability to drive superior returns, gives us confidence that we will continue to deliver benefits for our stakeholders.”