By Radhika Anilkumar
(Reuters) - British gambling group Entain (LON:ENT) reported a smaller-than-expected fall in online gaming revenue for the first quarter, as an increase in active customers helped it offset stiff competition and regulatory pressures in its main markets.
Shares in the company climbed nearly 4% in early trade.
The Ladbrokes owner, which is searching for a new CEO after the abrupt departure of Jette Nygaard-Andersen in December, said quarterly online gaming revenue dropped down 2% on a proforma basis, which includes revenue from acquired businesses.
Company-provided data showed analysts had expected a decline of between 4% and 6%.
On a reported basis, online gaming revenue grew 6%.
The UK & Ireland, Entain's largest market, posted a 9% fall in online gaming revenue but the company said operational improvements and the implementation of regulatory measures in the region will position the group for growth into 2025.
On the bright side, it returned to revenue growth in Brazil and saw strong volume growth across its international markets which include Italy, Brazil and New Zealand. Central and Eastern Europe markets - a separate category - also performed better in the quarter.
Growth in active customers during the quarter on a proforma basis climbed 11%.
The growth in volumes was partly offset by softer margins in Italy, where results from the Serie A soccer league went in favour of bettors.
The group reported 6% growth in total net gaming revenue in the quarter.
"A streamlined focus on core markets should lead to a turnaround in NGR (net gaming revenue) momentum later in 2024, with an encouraging return to growth in Brazil achieved already, analysts at Jefferies said in a note to clients.
(This story has been corrected to remove the reference to reported figures excluding newly acquired companies in paragraph 5)