GVC Holdings FY pre-tax profits plunge 40 percent

The full year 2015 results for online gambling group GVC Holdings were released Monday, revealing that pre-tax profits plunged almost 40 percent despite rising revenues from wagers, as the gambling company grappled with the cost of its GBP 1.1 billion acquisition of loss-making rival Bwin.Party (see previous reports).

The Isle of Man-based group reported that in the 12 months to end December 2015, profits were Euro 24.7 million compared with the Euro 40.6 million recorded in the preceding year. The losses were partly accrued by Euro 24.5 million recorded under “exceptional items”, with Euro 23 million related to the Bwin.Party takeover.

The numbers indicate that as a stand-alone entity Bwin.Party made a loss of Euro 42.3 million loss in 2015, compared to GVC’s business which posted a Euro 25.5 million pre-tax profit for the year.

Nevertheless, GVC remained optimistic, noting overall revenues for 2015 had increased 10 percent to Euro 247.7 million – representing the fifth consecutive year of revenue growth.

Kenny Alexander, chief executive of the merged company commented: “The completion of the Bwin.party acqusition in early 2016 affords us an opportunity to take the group to the next level. GVC has never been in been in a stronger position going forward. The enlarged Group is already enjoying encouraging trading.”

Looking at the figures in depth, the company reported its 2015 highlights:

• Net Gaming Revenue (NGR) up 10 percent on 2014 to Euro 248 million
• Clean EBITDA up 10 percent to a record Euro 54.1 million
• Profit Before Tax (excluding exceptional items) up 21 percent to Euro 50 million
• Fully diluted EPS (pre-exceptional) up 21 percent to 80.2 €cents
• Dividends in 2015 increased to 56 Euro cents
• Fifth consecutive year of NGR, Clean EBITDA and dividend growth
• Shareholders approved acquisition of Bwin.Party on 15 December 2015 which completed on 1 February 2016
• Materially strengthened management team at senior operational level and board
• Product and marketing tools significantly improved during the year

2016 Trading Update:

• Q1-2016 Total Group NGR at Euro 167.7 million, up 180 percent following the acquisition of Bwin.Party.
• Q1-2016, like-for-like, constant currency basis, average NGR per day, up 9 percent
• Year to 20 April 2016, like-for-like, constant currency basis, average NGR per day increases were:
Group: +13 percent
GVC brands: +18 percent
Bwin.party brands: +11 percent
PartyPoker shows first year-on-year quarterly growth for five years
•On track to secure Euro 125 million of synergies by the end of 2017 from enlarged GVC

Financial position
• Gross cash position as at 17 April Euro 327 million
• Group net debt as at 17 April Euro 193 million