LONDON, March 4 — Gambling company Entain did not declare a dividend today as it took a cautious stance and said the strong online growth that drove lockdown earnings could ease as betting shops re-open.
“All of our shops are still shut. There is light at the end of the tunnel for the pandemic, but we are still in the midst of it and therefore we just felt it was prudent to not pay a dividend,” finance chief Rob Wood told Reuters.
The comments also come against the backdrop of an ongoing regulatory review into gambling in Britain and after the company snubbed a US$11 billion (RM44.6 billion) takeover approach from its US joint venture partner MGM in January.
Entain shares, which scaled a record high of 14.94 pounds earlier this year after the approach, were down 2 per cent at 14.32 pounds by 0827 GMT.
While the pandemic led to the cancellation of sporting events and shut its physical shops, the FTSE 100 company has benefited from people stuck at home turning to their phones for entertainment.
Entain’s core earnings rose 11 per cent to £843.1 million (RM4.7 billion) for 2020, with £803.5 million of that from a 50 per cent online surge.
Smaller peer William Hill, which also operates hundreds of UK betting shops and is being bought out by US-listed Caesars, posted a steep drop in profit today.
American odds
Days after Entain fended off MGM in January, the CEO of Entain, formerly called ‘GVC’, left and the company named industry veteran Jette Nygaard-Andersen to the role of chief executive officer.
Nygaard-Andersen is set to oversee a period of regulatory change as parts of the United States open up to sports betting by overturning earlier bans.
BetMGM, Entain’s JV with MGM, will expand into 20 US states from 12 before 2022 and turn a profit in 2023, Wood said.
Earlier this week, rival Flutter said the US market could grow to double the size previously estimated.
Wood, meanwhile, expects annual online growth to decline year-on-year in 2021 as lockdowns ease, but was confident shops that should reopen next month have a future.
“People forget sometimes that our retail is bit more than the conventional thing. It is a social thing,” he said. — Reuters
