MARKET REPORT: Ladbrokes owner Entain shrugs off the woes in American football
Shares in the owner of Ladbrokes and Coral rose higher yesterday as it sought to reassure investors it was not hit by the same kind of losses as rival Flutter.
In an unscheduled update to the city, Entain said it expects full-year profits to exceed the £1.04 billion to £1.09 billion it outlined in October.
The company said the latest guidance came “despite consumer-friendly” sports results in the US, where the BetMGM partnership with MGM Resorts International operates.
Although Paddy Power and Betfair owner Flutter were not mentioned by name, the statement did specifically mention ‘updated guidance from industry peers’.
Flutter marked an earnings hit last week after recording the highest number of favorites to win NFL American Football games in almost 20 years.
Bookmakers tend to lose heavily when favorites win because large numbers of punters bet on them.
Losing streak: Flutter marked an earnings hit last week after recording the highest number of favorites to win NFL American football games in almost 20 years
Shares of Entain fell 10 percent in the three days after the Flutter update, amid fears about how the company was faring.
But they rose 9 percent in early trading yesterday before closing flat at 624.2p. However, the stock remains down more than 70 percent since its 2021 peak.
Flutter shares – which are listed in New York and London – rose 2 percent, or 410p, to 20880p yesterday.
Russ Mould, investment director at broker AJ Bell, said: ‘Entain has dodged a bullet in recent months when it comes to punters clearing NFL bets.
The market began to worry that Entain would suffer the same fate as Flutter, namely a dramatic losing streak with US sports betting, leaving the share price weak in recent sessions.
‘Entain may have scored the winning goal in recent months, but its share price has more than halved since 2021, implying something drastic needs to be done to revive its fortunes and regain market favor.
Today’s trading update is a good start, but the market will need more good news than a windfall.”
As the pound fell and government bond yields rose again, the FTSE 100 fell 0.3 percent, or 24.3 points, to 8,224.19 and the FTSE 250 fell 0.1 percent, or 15.57 points, to 19718.37.
The increase in crude oil prices increased oil inventories. BP rose 1.4 percent, or 6.1 cents, to 431.2 cents and Shell rose 1.5 percent, or 38 cents, to 2,663 cents.
But it did little for the airlines: IAG, owner of British Airways, fell 3.6 percent, or 11.3 cents, to 304.6 cents, and Easyjet fell 2.7 percent, or 13.6 cents, to 494.2 cents.
Engine maker Rolls-Royce also got caught up in the sell-off – down 2.2 percent, or 12.6 cents, to 567.4 cents – even as analysts at Berenberg raised their price target for the stock from 550 to 630 cents.
Shares in British biotech company Oxford Nanopore Technologies rose 8.9 percent, or 11.7p, to 142.7p after it said sales would rise to £183 million in 2024 from £169.7 million in 2023 .
Serco shares fell 1.5 per cent, or 2.2 cents, to 147.7 cents after the government outsourcer said boss Mark Irwin was retiring after 12 years at the company and was being replaced by Anthony Kirby, who heads state of the group’s UK and Europe division.
DIY INVESTMENT PLATFORMS
A. J. Bell
A. J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Invest for a fixed amount from € 4.99 per month
Sax
Sax
Get £200 back in trading fees
Trade 212
Trade 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.