DAVY VIEW

Entain reported FY23 results this morning. Headline numbers for the year were broadly in line with the guidance issued at the Q3 stage and our expectations. Focus quickly shifts to 2024. Management notes that although the year has started in line with its expectations, there are regulatory headwinds in the UK and Netherlands that could impact the FY by c.£40m (4% to our estimate). 2023 was a challenging year for Entain, losing share in a number of markets and seeing underlying declines in its online business. Although the headline valuation for the group is relatively low, further regulatory headwinds suggest that FY24 will be another year without meaningful profit growth. Key for us on the call will be the extent to which management can illustrate that the changes being made can deliver market share gains and return the group to growth in FY25.