Gala Coral turns in solid second quarter results

Gala Coral Group delivered strong results in its Quarter 2, 2014 trading update despite experiencing abnormally adverse football results during the quarter.

Key trading highlights for the Continuing Operations for the twelve week period ended 12 April 2014 include:

–   Turnover was 8 percent ahead of last year and gross profit of GBP 215.0 million was GBP 6.2 million or 3 percent ahead, reflecting growth in the Online business, Eurobet Retail and Gala Retail.

–   Continuing Opco EBITDA (pre-exceptionals) of GBP 62.7 million was in-line with last year, despite particularly poor football results.

–   Underlying EBITDA (pre-exceptionals) grew y-o-y by GBP 9.9 million or 16 percent after adjusting for the adverse impact of exceptional football losses (GBP 8.1 million), MGD, weather and the phasing of machine costs.

Coral Retail:

–   Gross profit was GBP 5.6 million behind last year, due to the abnormally poor football results in the quarter (GBP 5.4 million), and the phasing of machine costs recorded in gross profit (GBP 2.1 million).
–   Machines continued to outperform the market, delivering gross win per machine per week of GBP 965 (GBP 12 ahead of 2013).
–   EBITDA (pre-exceptionals) was GBP 8.9 million behind.

Eurobet Retail:

–   Gross profit was GBP 3.1 million or 61 percent ahead of last year.
–   EBITDA (pre-exceptionals) was GBP 2.2 million or 63 percent ahead.
–   Sports stakes were GBP 24.7 million or 63 percent ahead of last year, with 445 of the new tender licences open at the end of the quarter and the remaining 55 licences due to open in quarter 3.

Gala Retail Bingo:

–   Grew like-for-like admissions (3 percent ahead of last year)
–   EBITDA (pre-exceptionals) was 5 percent ahead for the second quarter running.

Online:

–   Gross profit of GBP 10.1 million was 44 percent ahead of last year.
–   EBITDA (pre-exceptionals) of GBP 11.4 million was GBP 6.6 million or 138 percent ahead.
–   Stakes were 62 percent ahead driven by increasing active numbers and spend per head.

Coral.co.uk:

Actives were 38 percent ahead of last year, driven by TV advertising, “Coral Connect” sign-ups, and improved site performance.
Sports stakes were GBP 43.5 million or 64 percent ahead of last year.
Live streaming bet in play stakes increased by 84 percent year-on-year.
Gaming stakes were 56 percent ahead of last year and a 0.9pp improvement in margin resulted in a gross win increase of GBP 6.8 million or 103 percent ahead at GBP 13.4 million.
Mobile penetration increased by 12.3pp to 64 percent of actives.

Eurobet.it :

Actives were 20 percent ahead of last year.
Sports stakes were GBP 5.3 million or 24 percent ahead
Gaming stakes were GBP 28.7 million or 26 percent ahead, driving total gross win to GBP 1.7 million or 22 percent ahead of last year.
Sports gross profit was GBP 0.1 million ahead, benefiting from less volatile sports margins than Eurobet Retail.
Gaming gross profit was GBP 0.2 million ahead, with virtual betting and growth in in-house games offsetting a decline in poker.
Mobile penetration is now at 42 percent of actives
Online sportsbetting market share is 9.4 percent, an increase of 1.0 pp over the past year.

GalaBingo.com:

39 percent increase in Galabingo.com spend per active.
YTD real money players are 5 percent ahead of last year.
Stakes were GBP 51.5 million or 24 percent ahead of last year
Gross win was GBP 2.6 million or 17 percent ahead.
Mobile penetration increased by 21.7pp to 52 percent of actives.

Galacasino.com:

Actives were 38 percent ahead of last year
Spend per active was 70 percent ahead, driving a 133 percent increase in stakes and a GBP 2.0 million or 73 percent increase in gross win.
Mobile penetration increased by 9.9pp to 31 percent.

Carl Leaver, Group Chief Executive of Gala Coral Group, commented:

“The Group delivered strong underlying growth for the second quarter in a row.  Online growth momentum is very encouraging with Coral.co.uk now coming through strongly. The combination of a single online wallet, improved content and simplified customer journeys is driving both actives and spend per head significantly ahead of expectations.

“The take-up on mobile is particularly pleasing with over 66 percent of sportsbook actives now using our mobile platform.

“In Italy, the demand for the new virtual betting products launched in the new year remains very strong in both Retail and Online, and the rollout of the tender shops continues to drive market share gain, with retail sportsbook market share now at 11.5 percent, up 4.1pp in twelve months.”

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