Entain PLC (LSE:ENT) (LSE:ENT) continued to hold fire on paying a dividend, even though first-half revenues and profits increased by double digits.
Its bookmaking shops in the UK, Ireland, Italy and Belgium, however, were “heavily impacted” by Covid-19 restrictions during the period, though as conditions continue to ease the group is confident that volumes will return to around 90% of pre-Covid-19 levels by the year end.
Total net gaming revenue (NGR) growth of £1.8bn in the first half of 2021 was up 11% on the year before, with retail revenue from its shops down 45% but online NGR up 28%.
BetMGM, the US joint venture with MGM Resorts, contributed NGR of US$357mln as it maintained its number-two spot, though with market share falling to 22% across the 20 states where it is operational from 24% recently.
Profit after tax for continuing operations came in at £91mln, up from £22.4mln, while underlying operating profits shrinking 12% to £205.6mln.
The board said the dividend is likely to be resumed at the time of full-year results in March, “assuming Covid-19 related restrictions continue to ease around the world”.
Management also reiterated the full-year EBITDA guidance that was recently hiked to a range of £850-900mln, and said they have identified a further £100mln of cost savings they expect to make by the end of the next financial year.
Chief executive Jette Nygaard-Andersen said it was the 22nd consecutive quarter of double-digit online growth.
“Entain has a long runway for sustainable growth built into our core business. In addition, our unique powerful platform puts us at the heart of the convergence of media, entertainment and gaming, providing us with exciting opportunities in interactive entertainment that we believe will further power our growth for many years to come."
The shares were down almost 1% to 1,948p in early trading on Thursday.
Broker Shore Capital said valuing the group's non-US facing assets at nine times EBITDA would imply a valuation of US$13bn for BetMGM on a 100% fully consolidated basis.
"This would be a sharp discount to the current $22bn valuation on Draftkings in New York, with momentum at BetMGM arguably stronger at present. Given the underlying momentum across the group, we would view the current valuation as conservative, especially with MGM Resorts lurking in the background."
Shore Cap said it continued to view circa £25 per share "as a medium term target".