A record-breaking World Cup final helped to narrow first-half losses at Ladbrokes owner Entain as it tries to stem the impact from higher taxes.
The gambling giant, which also owns Coral and Foxy Bingo, reported post-tax losses of £11.4million in the six months to June, compared to £85.8million a year earlier.
It pointed to the ‘major success’ of the World Cup, with betting activity almost double the previous tournament and the final ‘becoming the biggest football betting event in Entain’s history’.
Net gaming revenue, a key metric, rose 5 per cent in the first half, compared with a year earlier, ahead of expectations.
It was supported by 7 per cent growth in online revenue, with a particularly strong showing in the UK and Australia.
Headline earnings of £479million came in ahead of expectations, but the impact of the increase in gambling taxes, which came into effect in April, hit online growth.
The World Cup helped to boost earnings ahead of expectations but higher taxes continue to bite
The FTSE 100 firm said the year-on-year decline in online underlying earnings in the first half ‘reflects the impact of the UK remote gambling tax increase’.
Rachel Reeves raised remote gaming duty from 21 per cent to 40 per cent in her last Budget and announced a hike in the levy on online sports betting from 15 per cent to 25 per cent.
On Wednesday, William Hill owner Evoke, which has agreed to a takeover by Bally’s Intralot, revealed it had closed more than a fifth of its betting shops in the past year after being hammered by the tax changes.
Entain shut 45 stores across the Republic of Ireland and Northern Ireland earlier this year.
Chief executive Stella David said the changes had been ‘significant and disappointing’ but Entain was ‘well positioned to capture potential opportunities as the wider market adjusts to the higher tax regime’.
UK and Ireland revenues rose 8 per cent for the period, with 13 per cent growth online helping to offset the impact of high street shop closures.
Entain shares dipped 0.36 per cent to 558p, having shed 27.6 per cent this year.
Its joint venture with BetMGM reported net revenue growth of 4 per cent year-on-year to $1.4billion and adjusted earnings of $99million, driven by the World Cup and NBA playoffs.
However, Entain previously warned of a deterioration of conditions in the US and BetMGM has indicated it may take longer to reach $500million of adjusted earnings than the planned 2027 target.
Net debt stands at £3.6billion, which Entain looks to pay down following the sale of a 20 per cent stake in its Central and Eastern Europe unit to its joint venture partner EMMA Capital.
It plans to launch a phased exit from the region, with excess capital returned to shareholders.
Richard Hunter, Head of Markets at interactive investor, said: ‘Entain’s current strategy shows some pockets of strength as it attempts both to streamline the business and increase its attractiveness as a gambling destination, but more broadly there are other factors at play which have held back any share price progress.’
He added: ‘Despite all the turmoil, there is a loyal band of investors who remained prepared to take a punt on a business which undoubtedly has some exciting potential – if it can be delivered – and the market consensus of the shares as a strong buy reflects this commitment.’
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