MARKET REPORT: Entain shares in reverse after £585m bribery fine

Shares in Entain fell after it agreed to pay £585 million following a bribery investigation into its former Turkish activities.

In August, the owner of Ladbrokes and Coral told shareholders it had set aside the amount following a Bribery Act investigation by HM Revenue & Customs (HMRC) that began four years ago.

Authorities investigated the Turkish company sold by Entain’s previous management, GVC, in 2017, in addition to the activities of former suppliers and employees.

The leading company was fined for failing to take robust measures to prevent bribery.

Entain said it had struck a deal with the Crown Prosecution Service (CPS) to pay the amount over four years. It will also donate £20m to charity and pay £10m to cover HMRC and the CPS costs.

Entain chairman Barry Gibson said: “This legacy matter concerns a business that was sold by a former management team six years ago. The Group has changed enormously since these events occurred.” Shares fell 0.6 percent, or 5.4p, to 859p.

Gambling stocks took another hit after HSBC sounded the alarm over weak third-quarter results.

The broker said Entain is struggling to get to grips with a cocktail of woes from an underperforming British company to stricter regulation and higher taxes.

HSBC cut its price target to 1280p from 1520p but maintained its ‘buy’ rating on the stock as it believes value remains but warned a turnaround in the business will take time.

Business was barely better at Flutter as HSBC said the pace of growth at the owner of Betfair and Paddy Power is being weighed on by continued weakness in Australia. It cut its target price by 1880p but maintained a ‘buy’ rating on the stock as it believes there are several one-off issues that will be resolved.

Flutter dropped 1.4 percent, or 180p, to 12620p.

The FTSE 100 rose 0.06 percent, or 4.62 points, to 7488.2 and the FTSE 250 fell 0.1 percent, or 22.73 points, to 18458.1.

Retailers led the blue chip index after a busy Black Friday.

Kingfisher rose 2.1 percent, or 4.4p, to 219p, Ocado added 2 percent, or 11.2p, to 571, B&M jumped 1.7 percent, or 9p, to 545.2p and Tesco rose 1 .4 percent, or 3.8p, to 283.8p.

Mothercare endured a rollercoaster session after warning of further store closures.

In a setback for the baby goods retailer, global sales fell 15 percent to £137.2 million in the first half to the end of September, due to weaker trading in the Middle East.

Mothercare noted that business was particularly challenging in Saudi Arabia and warned that more stores around the world could close. But it wasn’t all doom and gloom. Profits rose 12 percent to £3.6 million as the group cut costs.

Nigel Parson, analyst at mid-market M&A advisers Cavendish, said the results demonstrate the “resilience” the group has built into its business model.

The shares, which initially fell 4 per cent, rose 12.8 per cent, or 0.6p, to 5.3p.

Bridgepoint made a profit when the private equity firm, which has owned Burger King in Britain since 2017, received a ‘neutral’ rating from JP Morgan. Shares rose 1.8 percent, or 3.8p, to 218.2p.

RM will close its loss-making classroom supplies business from the end of December in a bid to create a more profitable business.

The group says the Consortium has long underperformed since it rolled out an e-commerce platform in 2022.

It expects to write down the value of the business and set aside cash to cover closing costs. Shares fell 3.9 percent, or 2p, to 49.05p.