Entain PLC (GMVHF) reported a solid first half of 2026, with group net gaming revenue rising 5% on a continuing basis, beating internal expectations across both online and retail segments.
Online NGR climbed 7% with strong volume growth of 9%, marking the ninth consecutive quarter of online growth for the gambling and entertainment group.
Group EBITDA came in at 479 million, including 7 million of parent fees from BetMGM, representing a 2% decline year on year on a reported basis.
Earnings per share, excluding CEE, reached 20.3p, impacted by lower EBITDA, reduced joint venture income from BetMGM, and a higher effective tax rate.
Adjusted cash flow improved significantly to 43 million, up 38 million year on year despite the EBITDA headwind, while net debt remained broadly stable at 3.6 billion.
The company declared an interim dividend of 10.3p per share, representing a 5% increase, signalling management confidence in the underlying business trajectory.
UK and Ireland online NGR surged 13%, with volume growth also up 13%, as Entain gained market share despite a higher tax environment and tough year-on-year comparisons.
Australia, Spain, Canada, and New Zealand each delivered double-digit growth, with Australia up 13% following a successful brand reinvigoration programme.
The FIFA World Cup proved a significant customer acquisition catalyst, with first-time deposits doubling compared to the previous World Cup and BetBuilder stakes more than doubling.
Group CFO Michael Snape addressed concerns about the $500 million adjusted cash flow target for 2028, stating: “The disposal of CEE is broadly cash neutral when factoring in reduced interest costs.”
Snape also outlined the company’s cost reduction strategy, noting: “We have already announced the removal of 500 roles, which is about changing our model, not just cutting costs.”
The UK gaming tax increase weighed on profitability, delivering a negative impact of $56 million in the first half alone, which contributed to the year-on-year EBITDA decline.
Brazil remains a challenging market, with Interim CEO Stella David noting the company has maintained market share while taking a disciplined approach to profitability and improving player journeys.
Italy presented a mixed picture, with strong double-digit iGaming growth offset by weaker sports performance, prompting a revitalisation of the Eurobet brand including sponsorships with AS Roma and Napoli.
David commented on the Italy situation, saying: “We have plans to drive future growth, and we have packed additional marketing investment into our numbers to get sales back into more competitive growth in 2027.”
On capital allocation, Snape confirmed that proceeds from the 20% CEE stake sale will go fully to debt reduction, with the remainder of any future CEE disposal likely split between debt repayment and shareholder returns.
The company reiterated its full-year 2026 online NGR growth guidance of 5% to 7% on a constant currency basis, with online margin guidance unchanged at 21% to 22%.
A group-wide cost savings initiative targets 100 million in net annualised run rate savings by the end of 2027, supported by AI-driven efficiencies and structural simplification.
David offered a cautious but confident outlook, saying: “We started well and continued well into Q3,” while flagging potential margin volatility in November and December due to BetBuilder volume exposure.
Leverage remained flat on a reported basis at 3.1 times, with leverage including the deferred prosecution agreement slightly improved to 3.3 times, as the company works toward a more resilient capital structure.
