Liontrust UK Opportunities Fund on Entain plc
Thesis
Liontrust continues to hold Entain plc despite sharp falls in gaming-sector valuations. The manager considers both Flutter and Entain cash-generative operators with strong market positions and believes their shares appear undervalued. Brazil's new online-gambling restrictions and possible additional UK tax increases have weighed on sentiment even though Brazil is not currently a major earnings contributor. The fund expects a more stable regulatory environment may be needed for the perceived valuation gap to close.
“both Entain and Flutter are cash-generative businesses with strong market positions”
Key risks
- Brazilian restrictions on online gambling reduce the addressable growth opportunity.
- Further UK gaming-tax rises could pressure profitability and sector valuations.
- Regulatory instability may delay any valuation recovery.