Entain to offload Crystalbet after strategic review

21st May 2024 10:37

(Sharecast News) - Gambling giant Entain announced the end of a strategic review by its capital allocation committee (CapCo) on Tuesday, which assessed its portfolio to optimise shareholder value and leverage operational progress, confirming that it would now look to offload its Georgian brand Crystalbet.

The FTSE 100 company said the review affirmed that Entain possessed a diversified portfolio of strategic assets, brands, capabilities, and a broad geographic footprint, positioning it for sustained long-term growth.

It said it identified significant potential for future growth by focusing on organic revenue expansion, margin improvement, and strengthening its presence in the US market.

Entain said its financial position had been bolstered by the recent extension of its revolving credit facility (RCF) and the repricing and add-ons to its term loan, ensuring a robust balance sheet and leverage position.

As part of its portfolio reassessment, Entain said it had determined that Crystalbet, the leading gaming brand in Georgia, was non-core to operations.

The company said it would thus explore strategic alternatives for Crystalbet, including potential acquisition interest already received.

Key operational highlights from the review included Brazil's return to strong double-digit revenue growth in the second quarter, driven by enhanced customer acquisition and retention strategies.

In the UK, the implementation of a new voluntary industry code on customer safer gambling checks and industry-wide slots limits from September, coupled with an improved customer offering, was expected to support a return to growth later in the year.

Entain said its product development for BetMGM was advancing well, with recent launches in MLB and NBA sports betting markets leveraging Angstrom's unique capabilities, especially in parlay products.

Additionally, on 16 May, the Nevada Gaming Commission unanimously approved the applications of Entain and its subsidiaries without limitation.

Entain CEE was meanwhile continuing to perform robustly, with a promising outlook for online casino liberalisation in Poland.

The company said Project Romer was on track to achieve targeted cost savings by streamlining operations and enhancing efficiency.

It said the CapCo would maintain regular reviews of strategic progress and consider options to maximise shareholder value, including ongoing oversight of significant capital commitments.

"I am delighted that the Capital Allocation Committee has concluded its strategic review of our portfolio," said chairman Barry Gibson.

"Whilst we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy.

"The group has the core strengths, brands and products to be competitive across its markets and continues to be a global leader in betting and gaming."

At 1022 BST, shares in Entain were down 1.34% at 735.8p.

Reporting by Josh White for Sharecast.com.