MARKET REPORT: Entain shares in reverse after £585m bribery fine

Shares in Entain dipped after it agreed to pay £585m following a bribery probe into its former Turkish business.

In August, the Ladbrokes and Coral owner told shareholders it had set aside the sum following a Bribery Act investigation by HM Revenue & Customs (HMRC) that began four years ago.

Authorities investigated the Turkish business that had been sold in 2017 by Entain’s previous management, GVC, alongside the activities of former suppliers and employees.

The blue-chip firm was fined for failing to have robust measures in place to prevent bribery.

Entain said it agreed a deal with the Crown Prosecution Service (CPS) to pay the figure over four years. It will also hand £20m to charity and pay £10m to cover the costs of HMRC and the CPS.

Probe: Entain was fined for failing to have robust measures in place to prevent bribery

Entain chairman Barry Gibson said: ‘This legacy matter concerns a business which was sold by a former management team six years ago. The Group has changed immeasurably since these events took place.’ Shares sank 0.6 per cent, or 5.4p, to 859p.

Gambling stocks were dealt a further blow after HSBC sounded the alarm over a weak set of third-quarter results.

The broker said Entain is struggling to get a grip on a cocktail of woes from an underperforming UK business to tighter regulation and higher tax.

HSBC reduced the target price to 1280p from 1520p but kept its ‘buy’ rating on the stock as it believes there remains value but warned a turnaround of the business will take time.

Matters were hardly better at Flutter as HSBC said the pace of growth at the owner of Betfair and Paddy Power is being weighed down by ongoing weakness in Australia. It slashed the target price by 1880p but maintained a ‘buy’ rating on the stock as it believes there are several one-off issues that will get resolved.

Flutter dropped 1.4 per cent, or 180p, to 12620p.

The FTSE 100 inched up 0.06 per cent, or 4.62 points, to 7488.2 and the FTSE 250 slid 0.1 per cent, or 22.73 points, to 18458.1.

Retailers led the way on the blue-chip index following a busy Black Friday.

Kingfisher rose 2.1 per cent, or 4.4p, to 219p, Ocado added 2 per cent, or 11.2p, to 571, B&M jumped 1.7 per cent, or 9p, to 545.2p and Tesco increased 1.4 per cent, or 3.8p, to 283.8p.

Mothercare endured a rollercoaster session after warning of further store closures.

In a setback for the baby goods retailer, global sales fell 15 per cent to £137.2m in the first half to the end of September amid weaker trading in the Middle East.

Mothercare flagged that business was particularly challenging in Saudi Arabia and warned that more stores could close around the world. But it was not all doom and gloom. Profits rose 12 per cent to £3.6m as the group cut costs.

Nigel Parson, analyst at mid-market M&A advisers Cavendish, said the results demonstrate the ‘resilience’ the group has built into its business model.

Shares, which initially fell 4 per cent, surged 12.8 per cent, or 0.6p, to 5.3p.

Bridgepoint made gains as the private equity firm, which has owned Burger King in the UK since 2017, was handed a ‘neutral’ rating by JP Morgan. Shares rose 1.8 per cent, or 3.8p, to 218.2p.

RM will close its loss-making classroom supplies business from the end of December in a bid to create a more profitable company.

The group said Consortium has underperformed for a long time since it rolled out an e-commerce platform in 2022.

It expects to write down the value of the business and set aside funds to cover the costs of shutting it down. Shares fell 3.9 per cent, or 2p, to 49.05p.

This post first appeared on Dailymail.co.uk