Entain Plc (ENT) Earnings Call Transcript & Summary

Good morning and welcome to Entain's quarter 1 Trading Update Call. Please note this call is for analyst and investors. I will now pass to CEO, Jette Nygaard-Anderson to open today's call. Thank you.

Thank you. Good morning, everyone, and thank you for dialing in today. As always, I'm joined by Rob Wood and the IR team. Following our usual format, I'll kick off this morning with a brief summary of our Q1 performance and our progress so far this year in delivering on our strategic objectives and ambitions and Rob will then discuss the Q1 trading in greater detail, and then we'll open the call to your questions. I'm pleased to say that this has been a strong start to 2023, in line with our expectations. Across the group, we continue to demonstrate ongoing momentum in the underlying business, whilst also making excellent strategic progress as a diversified global leader in recreational entertainment. Today's Q1 results are further evidence that we are successfully delivering on our strategy. Q1 saw record highs on both online NGR, up 11% and active customers up 19%. Our retail shops continued to perform strongly with retail NGR up 13%. Group NGR, including our 50% share in BetMGM also hit new highs growing 17% year-on-year. Our headline growth numbers reflect the impact of some significant regulatory changes will improve some of our markets during the year that we've spoken about before. Therefore, what I think clearly demonstrates the underlying momentum is the performance of our online business, excluding the known regulatory headwinds in the U.K. and Germany. This would have been 6% up in constant currency. Having discussed our businesses exclusively -- having focused, excuse me, our businesses exclusively on regulated markets, we should pass through these significant regulatory changes through the year. Our industry has very exciting and attractive dynamics. It's both growing and expanding, providing new opportunities for us organically as well as through acquisition. Coupled with industry growth, the Entain platform is continuously evolving to ensure we can fully capture these opportunities by focusing on the customer and delivering recreational audiences a great offer and service. As we look forward and deliver further enhancements to our platform, I'm confident that Entain can deliver NGR growth ahead of our markets. Across the business, we continue to drive customer engagement, whether that be Super Bowl and March Madness in the U.S. or Cheltenham and Aintree in the U.K. For example, in the U.K., Coral flood at the Cheltenham Street for this Racing Club campaign, which saw us grow club membership by over 15% during the festival. The racing club continues to grow with sign-ups during the Grand National weekend, taking its total to over 110,000 members. In the U.S. BetMGM continues to perform well as we focus on executing on our long-term profitable growth strategy. We retain our leadership in iGaming with 28% market share and our position as a top 3 operator of sports betting and iGaming across the U.S. In Q1, BetMGM delivered revenues of approximately USD 470 million, up 76%, demonstrating another successful quarter's performance that included big tempo events like Super Bowl and March Madness, ongoing product enhancements, new game launches as well as 3 new market launches during the period. As you know, the Entain platforms market and customer data analytics enables us to focus on NGR and profitable growth. We remain confident as we continue to grow NGR whilst optimizing our retention bonusing. And I'm particularly pleased that our online sports NGR on a same-state basis grew by approximately 100% year-on-year. All key metrics of customer economics, player retention and cohort maturity continue to support our expectation to deliver positive EBITDA in the second half of this year. We continue to work with the BetMGM team to further improve the offer and drive further engagement and we are confident in our plans for this year and our ambitions of a 20% to 25% share in this exciting market. During the quarter, we also made further progress on our execution of strategic growth opportunities with further diversification and expansion across regulated markets and products. M&A remains a core driver of our strategy, with our most recent acquisition of 365scores, an exciting addition to the group. It brings interestingly live score data and sports content to the Entain platform providing our broader customer base with more data and content. You may remember, I spoke about opportunities of opening up the funnel for direct customer engagement, and this acquisition fits squarely in that strategy. And the team in Australia did a fantastic job in getting us selected as a strategic partner by TAB New Zealand. There are some New Zealand government approvals due to be confirmed but this partnership opens up an exciting opportunity, securing access to an attractive regulated growth market. We can see significant opportunities to grow the business alongside our operations in Australia. We'll share more detail around TAB New Zealand and 365scores opportunities later in the year. As always, our commitment to sustainability remains core to our strategy. As we already announced in January, we set a new benchmark for our industry by being the only major global operator to exclusively operate in domestically regulated and regulating markets. We are delighted to have continued our 6-year partnership with the Gordon Moody as charity with our latest funding commitment for a 2-year project providing responsible gaming support. Third-party ratings awards continued to attest that Entain is setting the pace for sustainability and clear safety for our industry and across the ESG blend stake. So in summary for me, we have started 2023 strongly making great progress operationally and strategically. The ongoing strong momentum continues to be visible across the group. We maintained unique platform capabilities driving underlying growth across our markets, brands and products. Our growth and sustainability strategy sees us focused on the customer, broadening our appeal and expanding across regulated market audiences. Q1's record Group NGR, record online NGR and record online active customers are the further evidence that we are delivering on our strategy, delivering high-quality and sustainable earnings. Alongside this growth, we continue to enhance our structures and processes to ensure our business is aligned to fully embrace our competitive advantages and capture exciting opportunities in the future. On that note, I'll pass to Rob for more details on Q1 trading performance.

Thanks, Jette, and good morning, everyone. As Jette has already mentioned, we started the year strongly, and our business continues to perform in line with expectations. Continuing strong momentum saw us deliver another all-time record for NGR in Q1, and both for the group and for our online business. On a reported basis, Q1 group NGR was up 15% or up 22%, including our half of BetMGM. On a constant currency basis, Q1 NGR was up 11% and up 17%, including BetMGM. Let me give a little more color on our performances across the group, and I'll reference constant currency numbers throughout now. Starting with online ex U.S. and Q1 NGR growth was up 11%, and in line with expectations. On a pro forma basis, online ex-U.S. NGR was up 1% for Q1. And if we strip out the headwinds we've previously discussed in the U.K. and Germany, that 1% pro forma growth becomes approximately 6%. Looking more closely by geography. In the U.K., NGR was down low single digits year-on-year, reflecting the ongoing absorption of affordability measures. As I discussed at the full year, we estimated that U.K. affordability measures were around a 10 percentage point headwind to 2022 performance in the U.K. and that we expect affordability headwinds to continue into 2023, but diminishing as the year progresses. Therefore, being down low single digits in Q1 implies the underlying U.K. business was otherwise in growth. And this underlying growth in the U.K. business is particularly evident when looking at actives which were up very strongly by over 20% in Q1 as we engage with more and more customers and continue to take market share. Australia is performing as expected. Continuing to take market share with slight growth in Q1 on tough comparatives and an easing underlying market. The quality of Ladbrokes and Neds product offering really differentiates ourselves from peers and the team continues to lead the charge on that front. Italy is growing very well in a strong market. Baltics are back into growth, now benefiting from softer comparatives, and Brazil just delivered a record quarter of actives ahead of market regulation. Germany continues to be our most challenging market with the ongoing lack of regulatory enforcement seeing us unable to rebuild yet. However, we remain hopeful that much needed enforcement action will become more evident during 2023. Finally, the contribution from our recent acquisitions in Croatia and the Netherlands was in line with our expectations, adding 10 percentage points to our online growth. As Jette mentioned, our total online business delivered another record for active players in Q1. Actives were higher versus Q4 and also up 19% year-on-year or up 14% pro forma. And whilst our greater recreational shift has seen a lower spend per head year-on-year in Q1, as expected, spend per head has been broadly stable since Q2 of last year. A final couple of points to mention on online before I move on. Firstly, sports margin. Q1 was a little higher on a year-on-year basis at 13.5%, which reflects our increasingly recreational customer base, fixed year results in the quarter and also the addition of SuperSport, which is a higher-margin business. Secondly, some of you will have noticed from the table in the RNS, the unusual delta between sports and gaming growth in Q1 in our online business. There are a few drivers of this. Firstly, the return to growth in the Baltics is gaming driven, and the decline in Germany is largely sport driven, but the most notable point is a result of the acquisition of BetCity which is primarily a gaming business. I would, therefore, expect a differential to continue through this year. On to retail and the excellent performance seen last year has continued into Q1 with the business seeing a strong start to 2023. Q1 NGR was up 13% or up 9% pro forma for SuperSport and growth was across all geographies and across both sports and gaming. Our best-in-class machines and revitalized in-store digital offerings are driving volumes as well as engaging a younger customer demographic. Before I turn to BetMGM, let me comment briefly on our most recent deals, the acquisition of 365scores and our exclusive partnership with New Zealand TAB. We look forward to sharing more detail on financial contributions to 2024 and beyond in due course. But combined, we do not expect a contribution to EBITDA in 2023, in particular, while New Zealand Tab remains on legacy technology. And finally, to BetMGM, which continues to make excellent progress, delivering very strong growth and executing in line with our long-term profitable growth strategy. The business is on track to deliver guided revenue this year of between $1.8 billion and $2 billion. With our focus on NGR, we are continuing to grow whilst also improving our product and app experiences. And I think it's worth me reiterating an important point earlier from Jette. Player economics continue to be extremely attractive, and hence, cohort profitability is coming through in line with our expectations. And it's these player economics that are seeing us reach positive EBITDA in H2. So the business is growing extremely strongly with revenue up 76% in Q1, and profitability is coming soon. So wrapping up, we continue to demonstrate ongoing momentum embedded across our underlying business with revenue growth of 17% across the group. Entain is the most geographically diversified and globally regulated operator in our industry. We continue to make excellent progress, focusing on the customer, broadening our recreational audience and outperforming our markets. Our underlying performance and momentum reinforces our view that over the medium term, Entain is a strong growth business with expanding EBITDA margins. Entain operates in growth markets today. We expect to grow ahead of those markets and we expect further growth on top from both M&A and expansion into new markets as they regulate. With that, I'll hand the call over to our operator, who will open the lines for Q&A.

[Operator Instructions] We will take the first question from line Edward Young from Morgan Stanley.

My first one is on BetMGM. It was a very good NGR number in Q1, frankly, it already makes the '23 guidance looks a bit conservative. You referenced share there Jette. Should we see that 20% to 25% share target, which you're currently below is less relevant or even irrelevant given how you're talking about GGR and NGR? Or do you think that with the product improvements that could come later this year, so the single wallet and around 1 game parlay will potentially mean that, that share even in GGR terms starts to come back up. The second question is on 365scores. I was going to ask you for contribution, but it sounds like you're not going to give it, so I'll hold that. But more broadly, can you talk about the strategic rationale behind that purchase. So should we think of this as an affiliate business? Is it something a bit different? And more broadly, do you think the accumulation of some of the small deals you've done preclude doing something larger in terms of use of capital for M&A or returns to shareholders? And then my final question is on regulated markets. There is obviously 1 big market that is regulating in your regulated mix, which is Brazil. You've given commentary around Germany, and that business is clearly down sharply. Looks like it's over half -- less than half of what it was pre regulation. So just in that light, can you touch on the risks and the opportunities about Brazil? There's clearly momentum to get something done there. But there's also noise around the potential iGaming switch off, potential play winnings packs, questions over exactly what the effective tax rate will look like. So can you share some of the risks may be in that business? Or if I look at it the other way around what do you see as the key elements you need to see from Brazil regulation for this not to be a sort of material headwind, whether it's in H2 or '23 or into 2024?

Yes, let me kick off with these questions one by one. Let me start with BetMGM. And as you say, the business continues to perform strongly. We're really pleased with the -- with Q1, with NGR 76% and NGR USD 470 million. And that's really the key number, and I think you alluded to that as well. So we are on track to deliver guidance for the year, which we've set out at $1.8 billion to $2 billion as well as becoming profitable in the second half of the year. So we're not changing guidance by now, but very pleased with where we are. And other key number is, of course, that we are growing same-state online sports betting by approximately 100%. That's another killer number for us when we look at the business. So where we are right now, very happy with the NGR numbers very happy with the performance of the business. Now when it comes to GGR market share and the medium-term target that we set out around 20% to 25%, we're still happy with that. We're not changing it as it is. Our iGaming business is doing great. It's with a market share around 28% last 3 months to February. It's doing very strongly. And we are super focused on our sports product continuing to grow that. And I think the testament of growth in same-state NGR is really pleasing. But we continue to be laser-focused on the sports product. As I said on our last call, I really see that as an enormous opportunity for us. In-play percent of handle is growing, parlay is growing in terms of bet counts, also same-game parlay is growing, but there's more opportunity for us here. So as we look ahead of the year, we're excited to continue to improve our products on the sports side and also looking to hopefully launch single -- a [indiscernible] single wallet later in the year. All opportunities for us but happy with the guidance we've set out in terms of medium-term GGR share of around 20% to 25%, where we set that probably you should look at iGaming in the top of that range and online sports betting in the lower end of that range. When it comes to 365scores, that's a world-leading scores app. And I think there is an important distinction here from the broader segment of affiliate business. We acquired a large score apps business and a content business here. It's a top free operator in Brazil. It's top 5 globally. It has a diversified audience across multiple regulated markets. And scores app are really important verticals when it comes to sports betting. Its highly engaged audience, the average sports fans, highly scalable business. It's very high convergence to real money gaming and then it's an amazing data-driven business and with a very impressive team. So that's also something that's important. It's an amazing addition to the Entain platform in terms of focusing on building superior data capabilities. So strategic rationale here is, and you've heard you talk about this before, is how do we continue to engage our customers, especially on the broader recreational side, how to expand our offers to drive long-term value and lifetime value for the customer. But also how do we improve the cap and get on top of the funnel and 365scores delivers on all these elements and also supports our global growth opportunities. So very happy with that business. It's profitable as is. But in terms of more details on the business and the KPIs, that's something that we will update you on later in the year. What does that mean for M&A? Well, listen, we take a flexible approach to our capital allocation. So every time we look at opportunities on how best to allocate capital and reevaluate all the opportunities, whether it's M&A or whether it's share buybacks. So I don't see the acquisition of 365scores to really impact that strategy as is. We're still focused on both delivering on opportunities into new markets as they regulate on strategic opportunities and organic opportunities and then, of course, look at the best way on allocating capital going forward. Finally, on Brazil, yes, a lot have been going on in that market, so quite recently in terms of regulation. So the government announce -- has now announced the key features but we don't have all the informations. And part of that is a betting duty of 15% of GGR and then adding to that corporate taxes. There has been talks about retaining the existing taxation that we see on lottery with a net profit of 30% of -- sorry, profits on winnings of 30% of net profits for winnings exceeding a certain amount. But we still need to see the details here and for those to be confirmed. And we have one of the leading brands in the Brazilian market. We've been investing into this market for many, many years. Actives continue to grow. Key indicators really indicate that this is going to be a very exciting market for us. So overall, we remain really excited about the Brazilian market. The team there is focused. We're entering into a number of new partnerships. So hopefully, we'll have more clarity over the next couple of weeks, and we expect that regulation will be affected immediately, but then being rolled out either towards the end of the year or latest early 2024. And in terms of iGaming, there's a parallel process there, but we don't know yet. But iGaming in Brazil is a small -- is small for us. So we don't expect to see any big impact. The real opportunity here for us is to get online sports betting regulated. I'll stop here. That was a long answer. I hope that was helpful, Ed.

We will take the next question from line Joseph McNamara from Citi.

The first one, I was wondering if you could walk us through the growth -- online growth kind of exit rate of 8% constant currency in Q4, which had a few benefits from SuperSport and the World Cup down to the pro forma growth you called out of 1% constant currency for Q1. Just anything I might be missing there in the bridge. And then the second one is on retail. And I guess, is there any reason why the momentum, the very strong momentum seen in that business shouldn't continue into Q2 and the rest of the year as consensus currently has flat growth for the year.

Joe, I'll hand you over to Rob for those 2 questions. Rob, Online growth, exit rate Q4 bridge into Q1 pro forma and retail.

Very good. So the bridge from 8% in Q4 last year to 1% in Q1, you've touched on the key points we called out the World Cup was about a 2-point contribution to Q4. We also called out SuperSport closing in November was also about a 2 percentage point contribution. We also called out the strong margin in Q4. You might remember October 2021 was one of those shocker months for the industry. So Q4 of '22 had some margin upside. So you can bridge the gap across those 3 things. There was also some bits and pieces like a small contribution from sports interaction, for example, still in the numbers in Q4 and not in the pro forma. But really, those first 3 that I mentioned, the World Cup, SuperSport and margin bridges the gap and then on to retail. So yes, a very strong start to the year. I don't expect the level of growth that we saw in Q1 to continue across the rest of the year. There are a few watch-outs to point out. Firstly, the acquisition of SuperSport, we'll annualize that later in the year in November. So Q4 growth, logically, therefore, won't be as strong. But also Q1 was lapping against some COVID -- residual COVID impacts in the prior years. So for example, our Belgium estate was closed in January of 2022. And also even in the U.K., whilst we were fully open, there were still lingering staffing issues from Omicron. So if you haven't got a workforce available, you can't open a shop that sort of thing. So those are the main reasons why I'd expect retail growth to cool now as the year progresses.

Can I just ask a quick follow-up on that last point. Is there any way you're able to give I guess, as you do sometimes with online for that retail growth number, the kind of 9% pro forma growth, what that would be kind of ex those one-off cover effects maybe?

I would hazard a guess low single digit, but we need to a little bit more. The Belgium estate is relatively small. And as I say, the staffing issues were really back end of '21 and early '22, still, it's not going to be a material impact. It would still be underlying growth, but it wouldn't be high single digit.

The next question from line KiranJot Grewal from Bank of America.

Just a couple of questions from me. Firstly, could you share some more color on your sports margin? What's been driving the strength in that? I know you said Q4 was a particularly strong one as well. It'd be interesting to hear more about that. Secondly, wages were slightly softer despite the M&A. Is it the U.K. and Germany behind -- the main driver behind that? Or is there anything else we should be considering within that? And then lastly, I think you mentioned the Baltics has started to cycle as of late Q1. Are you able to sort of give us a figure or outline how much half that should be for the rest of the year?

Kiranjot, all your questions are quite specific to our Q1 trading. So Rob, do you want to take over?

Yes, happy to. So sports margin, we've seen it progressively to go up for the last few years. Really COVID was an accelerator of that as more recreational activity went online. We've also had our underlying strategy for a number of years now to really focus on the mass market recreational audience. Again, that has an impact. More recently, things like U.K. affordability measures have logically driven a greater mix of recreational activity, which again supports margin growth. So those recreational mix, I would say, is the biggest driver of the ongoing increases adding SuperSport to the mix and [ about 0.1 ]. So it's something, but it's not large. And then generally speaking, results were pretty decent in Q1. We did have some poor football in February, particularly U.K. and Europe across Champions League or Open League, but all part of the normal diversification impacts of overall sporting results were reasonable in Q1. I don't think there's too much more to say on margin. On wages, you called out the 2 markets that are really driving the decline, Germany and U.K. In the case of Germany, we will annualize against the cross-operator sports limits in the second half of the year. So that will be helpful. And as you've heard us talk about many times, if we can see some enforcement on the noncompliant operators, that really should be the catalyst for a return to growth and with the U.K. very much driven by U.K. affordability measures, as we've spoken about, actives growth was super but over 20% in the quarter. And that's really showing that all the uplift that we saw in Q4 from the World Cup has been retained into the new year. So that's a real positive. But until we annualize out the impact of U.K. affordability, I would expect U.K. wages to remain under pressure. And then your last question was about the Baltics. The Baltics are what, 3% or 4% of our mix. So a return to growth, let's say, from minus 10 to plus double digits. We would shoot for 20% of 3 to 4 points. That's really the weighted contribution that I would expect Baltics to add. And Georgia is another country for interest that source and declines, particularly in the second half of last year when it implemented a new regime in the first half of last year, that's back into growth. So a similar story there. So all supporting the return or the incremental, sequential quarterly improvements that we expect in our online business as we progress through the year. So online, very much on track.

And just going back to the first question, have you seen now that you've got more recreational -- are you seeing a higher mix of your betting coming from parlay product ex U.S. and your core business?

Yes, it is ticking up. But as I say, I think that is more a reflection of the customer mix than particular product development. But the answer to your question is yes, the multiples mix is ticking up all the time. And things like Bet Builder, as we call it in the U.K. same game parley or same race multi wherever in the world you live. These things are getting better and more appealing to customers. So that's helping. But in my view, the primary driver is an increasing recreational mix.

We will take the next question from line David Brohan from Goodbody.

Firstly, on FX, it appears that there was a decent benefits in Q1. Just wondering if you could call out some of the big drivers for that. Secondly, on the U.S., I think you delivered a very strong NGR performance despite maybe some concern around GGR share losses. I wonder if you could give any color on where your bonus in percentage landed in the quarter or how it has evolved since last year? And then just finally, in Australia, anything you can add on how behavior of new competitors has evolved in recent months?

Let me touch upon U.S. and Australia, and I'll hand you over to Rob for the FX question. So just on the U.S. as we outlined on the update that the BetMGM team had in January, we've been implementing bonus optimization measures through most of 2022. And then, of course, into 2023, ensuring that we are rewarding and retaining the valuable customers here, all built on the Entain data, analytics, experience, market and so forth to focus on maximizing the player metrics here. And of course, this will inevitably impact the GGR share. We knew this upfront, but we are comfortable with this as -- we are growing NGR as we said this morning, up 76% this quarter. OSB same-state growth, approximately 100%, fantastic. We're also delivering greater margins, so NGR to handle, and that grew significantly during 2022. So we're seeing the bonus share come down as well. And our actives are growing. Our player economics are very strong, as we said in the introduction this morning, and then more importantly, our cohort built in line with expectations, which is why we are on track to deliver profitability in the second half. So I'm not going to give you a specific number on the bonus percentages, but it is ticking down and it's supporting all our KPIs here and the business in terms of the profitability outlook. So very pleased with that. In terms of your question around Australia, yes. So in terms of the competitive situation there, I mean, Australia is a market that remains as competitive as ever. But we are really pleased with how the team is doing down there and continue to perform strongly. Slight positive growth there, and we expect that we are taking share. But still early days. But -- so we'll know more for sure, but we do expect that we are outgrowing the market. Specifically around competitors, there's been some noise around the new competitor bidder that enter in the second half, offerings here are very heavily promotional-let rather than focused on product and quality and they have hated some months in terms of their promotional pressure there. But still, there is competition in that market, and that will probably continue. But we are really, really pleased with how the team is doing, and we are focusing on product innovation, and it's really paying off. Rob, can I hand FX over to you, please.

Sure. Yes. No particular story. I mean, normally, we have a smoothing diversification effect as various currencies, some perform well, some perform less well. In Q1 year-over-year, it's the case of pound sterling performance. And therefore, the currency variance is all in the same direction across all our currencies. But to give you the specifics euros is the main one, but also Australian dollars, Brazilian real, Georgian lari, all effectively moved in the same direction, and that's what's created a wider than normal diversions between reported growth and constant currency growth.

We will take the next question from line Joe Thomas from HSBC.

A couple of questions, please. First thing, interested in the way you split out the online NGR, the sort of 6% pro forma versus kind of versus the 1% including the regulatory impact. I just wonder at what point you think that the gap between those 2 will narrow? I mean, we've obviously got tailwinds potentially coming through in Germany, but headwinds coming through in Brazil, possibly elsewhere. I just wonder how long you think that gap is going to last for? And second thing is, again, so with respect to capital allocation and so on. There is one area that seems to be where regulatory progress just seems to be making -- happening at the moment in the world, which is India. And you're notable there by your absence. And I just wondered from a headline view, why it is that you're not in India and what you might plan to do there?

Okay. Thanks for your questions, let me take the latter one around India, and then I'll hand you over to Rob for online India performance -- sorry, excuse me, pro forma versus underlying. So in India, you are right, and this is a market that we are monitoring really carefully. The Indian government has taken some steps now to watch national regulatory framework. Remember, it's been really federal-let. Sorry, it's been really state-let up until now. So there are some steps towards national regulatory framework coming in place for online gaming, and there were signed some ministers now to oversee some self-regulation and customer protection standards. But it's very much focused on still on skill base. There's also some things happening for eSports regulation. So right now, sports betting and iGaming falls outside the scope of these initiatives. But it's a market that we are super interested in for many reasons, a population, they love their sports and cricket, and we have many people in the market, of course, that would love to see us launch there. So we are laser-focused following regulation, but we haven't taken any steps yet. Rob, can I hand over online NGR pro forma versus underlying, please?

Sure. So we absolutely expect the second half of the year to have that gap narrowed significantly. And that really ties to our guidance if we start the year with 1% pro forma, and that gap narrows and disappears by Q4, say, that would imply that we'd end the year at plus 6%, and that really means across the full year, you can see the guidance of low to mid-single digits, we're on track to deliver that. There is, of course, potential impact from the white papers, for example, which is not in guidance, but as we've talked about a lot, it seems likely that we won't see any material new impact from those. So that's a positive. There are some other positive drivers as we progress through the year. I've mentioned already things like the Baltics being back in growth, Georgia being back in growth. But the simple answer to your question is that gap should narrow as the year progresses. And one would hope that by Q4, it's largely disappeared.

[Operator Instructions] We will take the next question from line Jemma Permalloo from JPMorgan.

I think I've asked this question before, and I just wanted to checking on your plan for the outstanding Ladbrokes bond. I think you mentioned on the last call that you hope to address the maturity by summer. Is the plan to still use a combination of cash and then maybe refinance in the market either for bonds or loans?

Thank you for your questions. Rob, that one is for you.

Sure, Jemma, thank you for the question. Really, the same answer as before. So continue to look at options, as you say, could use cash, could extend term loans and could issue a bond, all options currently under review.

And if I may, is there any reasons as to why you wouldn't have to or you wouldn't want to issue any more from this entity and would rather start issuing from the sort of parent entity going forward?

Okay. I don't have anything further to say on the refinancing other than I'm sure you'll see something from us in due course.

There's no further questions. So I'll hand it back over to your host to conclude today's conference. Thank you.

Okay. Thank you all for listening in today. As our Q1 results demonstrate, Entain's ongoing momentum is underpinned by the underlying strength of our business. And our relentless focus on the customer, our increasingly diversified reach and our powerful Entain platform sees us confident for rest of the year and well positioned for many years to come. I look forward to speaking to you again at our interim results in August. And in the meantime, if you have any other questions, do get in touch with David and the IRR team. Thank you, and goodbye.

Thank you for joining today's call. You may now disconnect.