Entain PLC (LON:ENT) has bounced outgoing chief executive Shay Segev out the door six months early and promoted non-executive director Jette Nygaard-Andersen to the top role with immediate effect, along with some other board changes.
The Ladbrokes owner also confirmed full-year underlying profit (EBITDA) for 2020 will be around £825mln-£845mln after 41% growth in online net gaming revenue in the fourth quarter counterbalanced declines from the closure of its bookmaking shops due to coronavirus (COVID-19) lockdowns.
Trading at BetMGM, its US joint venture with MGM Resorts International, which earlier in the week pulled out of a takeover bid for the FTSE 100 company, was said to be going “from strength to strength” as it prepares to go live in its 12th state on Friday, with a US market share of roughly 18%.
Full-year US net revenues are now expected to be in the range of US$175mln-US$180mln, the group said, ahead of its previous guidance.
Segev, who recently gave his notice after accepting an offer to be boss of sports streaming group DAZN, said “the short-term outlook remains uncertain as a result of the ongoing impacts of COVID-19, [but] we have entered 2021 with good momentum”.
Now the FTSE 100's eighth female boss, Dane Nygaard-Andersen joined what was GVC Holdings in 2019 with a wide-ranging CV, most lately as divisional CEO of Swedish broadcasting and esports group Modern Times, and before that CEO of satellite group ViaSat Inc (NASDAQ:VSAT) and chair of Danish esports organization Astralis.
Entain noted that Nygaard-Andersen has an “extensive track record of working with fast-growing digital next-generation online and mobile entertainment companies offering video gaming, e-Sports, and social media video content” and so “brings significant experience to the CEO role that reflects the evolution of Entain into an entertainment-focused company”.
Chief financial officer Rob Wood is also being given the role of deputy CEO alongside his current role, where he will be responsible for all retail operations and overseeing M&A activities.
The group said that chief operating officer Sandeep Tiku, who was promoted from chief technology officer last July, will join the board later in the year.
Initial market reaction
Shares in the group rose inititially, then fell and by lunchtime were flat at 1,269p, up more than 40% over the past 12 months, but down 14% from their recent all-time high after MGM dropped its offer.
“Having rebuffed MGM’s takeover bid and lost its CEO, Entain needed a robust set of results in the final quarter of the year to settle investor nerves. These numbers look to have delivered and kept the shares trading some way above where they were before MGM’s offer was made," said analyst Nicholas Hyett at Hargreaves Lansdown.
“It’s evidence that the Entain board may have been justified in arguing the MGM offer 'significantly undervalued' the group – particularly given the very strong result from the US joint venture."
He said that the 130% increase in US online revenues is the standout number, but noted that double digit growth was spread across markets from Georgia to Brazil.
"The next 12 months or so will be interesting to watch," Hyett added. "On the one hand the end of lockdowns around the world will probably hit online sports betting as customers turn to other forms of entertainment. On the other, sports events will be back on track and structural growth in the US and elsewhere will continue. Overall, we think the group remains well placed even without an MGM offer.”
Nygaard-Andersen has a "lack of experience in executive roles" that "may see some questions raised, especially in an industry that remains a bastion of male dominance, as even the debate within horse racing over the role and skills of jump jockey Bryony Frost currently suggests", said Russ Mould, head of investment at AJ Bell.
“Nygaard-Andersen will take the helm of a company whose assets include Ladbrokes and Corals, British bookmakers that have never before had a female CEO, although shareholders will doubtless look to the phenomenal success of Bet365 under Denise Coates as proof that skills and drive matter while gender doesn’t.
“Boardrooms need, and benefit from, diversity of experience and background especially as this helps management teams to avoid the dangers of group-think and confirmation bias. This will be particularly important in the global gambling business, where the rapid pace of change in both technology and regulation mean that fresh opportunities and dangers are presenting themselves all of the time.
“Entain is now the eighth current member of the FTSE 100 to have a female boss (and the two investment trusts, Scottish Mortgage and Pershing Square both have female chairs who head their boards)."
--Adds shares and broker comment--