Stocks Tracker: June the dark side of the moon as share prices slump across industry

Entain

1 June closing: 1.460p

30 June closing: 1,230.50p

Peak June closing: 1,460p

Gambling stocks took a battering in June as fears over any potential impact of the upcoming white paper into the Gambling Act 2005 took hold, coupled with the growing concerns around the cost-of-living crisis.

London-listed Entain felt the full force of these factors, seeing its share price drop 15.5% in June alone, leaving the operator giant with a market cap of £7.3bn.

A steady start at the beginning of the month was rubbed out between Thursday 9 June and Monday 13 June, with the firm’s share price falling from 1,450p to 1,341p over the weekend. A major M&A move which saw Entain secure its entry in the Netherlands, usually cause for shareholder celebration, went down like a lead balloon.

Entain secured a deal to acquire Dutch operator BetCity in a cash-plus-earnings-related deal which could see the firm pay up to €850m. Entain will pay an initial €300m out of its existing cash resources.

With the firm’s much talked about absence from the Dutch market, resulting in a severe downturn in its European revenue, the market responded by lifting Entain’s share price from 1,341p to 1,341.50p on Tuesday 14 June.

A slight rise the following day to 1,375.50p was the best of the rest for the firm, with the remainder of June seeing its share price struggle to return to its 1,400p benchmark.

888

1 June closing: 204.40p

30 June closing: 166p

Peak June closing: 207.20p 

Another London-listed operator, another June of haemorrhaging share prices, with 888 shares dropping 18.1% in what became a disastrous month for gambling firms on the market.

Similarly, to Entain, the month started with some promise for 888 before a significant downturn in fortunes despite the looming completion of its acquisition of William Hill’s non-US assets.

It was a month of radio silence from 888 until the final week of the month, but when the static was cleared and an announcement brokered the peace, the adage no news is good news sprang to mind.

On Thursday 23 June, 888 revealed its final trading update before the completion of the Hills deal, revealing revenue of £690m for the 12 months ending 28 February 2022, along with an adjusted EBITDA of £109m and an expectation to report revenue of between £330m-£335m for the first half of 2022.

888 also noted Hills returned £1.3bn in revenue but this growth was offset by impacts of increased safer gambling measures on its UK online portfolio, and market adjustments arising from exits from online markets including the Netherlands.

Despite some impressive financials, the market reacted with a flurry, sending 888’s share price down from 175.30p to 160.70p by close of business.

The following day, EGR exclusively revealed Hills CEO Ulrik Bengtsson has stepped down from his role ahead of the merger. As a result, 888’s stock rose slightly, but insignificantly, to 161.80p.

Kindred Group

1 June closing: SEK96.36

30 June closing: SEK85.06

Peak June closing: SEK103.45 

“In, out, in, out you shake it all about,” chimes the classic party track Hokey Cokey and Stockholm-listed Kindred Group has seen its share of entries and exits in a rollercoaster June for the firm.

The early headline news saw the operator confirm its return to the Netherlands after an eight-month exile which had greatly hampered its revenue.

In Q1 2022, Kindred partially blamed its 30% year-on-year (YoY) decline to £246.7m on its absence from the Dutch market.

On Wednesday 8 June, shareholders rejoiced as the operator confirmed it had been granted a licence by the Netherlands Gambling Authority after serving its cooling-off period.

Kindred’s share price rose from SEK96 to SEK103.40 on the back of the news, which then increased to a monthly high of SEK103.45 on Thursday 9 June.

And with one market entry, one market exit came, as the Malta-headquartered firm confirmed its withdrawal from the German market due to what it labelled “unsustainable” market conditions on Friday 17 June.

Kindred noted the exit from Germany would have an “insignificant” monetary impact on the firm’s financials going forward.

And with that, the operator went “knees bent, arms stretched” preparing for the impact of a share price slide following their Deutsch decampment.

In reality, the market was nonplussed and the group’s share price remained unmoved at SEK93, with the general consensus of the regulatory headwinds in the market more trouble than its worth.

A final twist in Kindred’s geographic gameplan saw the firm confirm it would continue to fight against rulings in Norway that demand its Trannel subsidiary to leave the market following the latest decision from the Oslo District Court. Kindred’s share price dipped to SEK89.50 on the news.

Evolution

1 June closing: SEK994.20

30 June closing: SEK926.10

Peak June closing: SEK1,018.20 

Dipping below SEK1,000 a share for a publicly listed Swedish company wouldn’t usually solicit alarm bells. But, live casino giant Evolution is no normal publicly listed Swedish company. Its share price has run it at four-figures on a relatively consistent basis since February 2021, so recent dips into the three-figure world will be less than pleasing for the Stockholm firm.

The first day of trading in June was perhaps a taste of what was to come, closing out at SEK994.20 on Wednesday 1 June, having closed at SEK1,021.40 at the end of May. A quick jump above the SEK1,000 mark followed before a significant fall on Friday 10 June to SEK936, a prelude to an even greater decrease to SEK905.50 the following week.

A slight reprieve was not abated by the opening of its new live casino studio in Armenia with Evolution’s share price eventually bottoming out at SEK898.70 on Friday 17 June.

The announcement of its €340m acquisition of slots developer Nolimit City on Wednesday 22 June helped catalyse a share price recovery heading into the end of June.

Evolution’s stock rose to SEK935.50 on the back of the news, before peaking at SEK978.60 on Monday 27 June.

The deal involves €200m cash upfront, with the other €140m in earnouts based on Nolimit City’s EBITDA over the next three years.

Nolimit City is expected to generate €30m in revenue this year, with EBITDA of €23m.