GVC Holdings posts H1-2018 interim results

Multinational sports-betting and gaming group GVC Holdings plc posted its H1-2018 results Thursday, highlighting the following indicators:

* Proforma Group NGR up 8 percent at GBP 1,717.0 millions;
* Proforma Group revenue up 8 percent at GBP 1,694.3 millions;
* Proforma Group underlying EBITDA up 11 percent at GBP 349.5 million;
* Proforma Group underlying operating profit up 17 percent at GBP 277.9 million;
* Adjusted diluted EPS of 32.2p up 30 percent;
* Interim dividend of 16.0p per share (H1 2017: 14.6p);
* Adjusted net debt at 30 June 2018 of GBP 1,887.0 million.

Operational highlights in H1 included:

* Good momentum in Online with market share gains in all key territories; NGR up 18 percent (+20 percent in constant currency); Sports brands up 19 percent (+21 percent cc) and Games brands up 13 percent (+15 percent cc);

* UK Retail like-for-like NGR down 3 percent; a good World Cup helping offset the impact of poor weather in first half;

* European Retail NGR up 29 percent (+26 percent cc) with strong growth in Italy;

* Positive World Cup tournament driven by both gross win margin and volumes;

* Completed the acquisition of the Ladbrokes Coral Group on 28 March; Capex synergies of at least GBP 30 million now identified. Integration progressing well and on target to achieve at least GBP 130 million cost synergies by 2021;

Current trading July 1 to September 2 2018:

* Established a 50/50 joint venture with MGM Resorts to create a sports-betting and online gaming platform in the U.S;

* Strong current trading: Group proforma NGR up 14 percent with strong growth in Online (NGR up 30 percent) and European Retail (NGR up 26 percent);

* Product development and marketing driving continued market share gains.

GVC Group chief executive Kenneth Alexander reported:

“The performance of the GVC Group in the first half has been extremely pleasing in what has been a very busy period. Strong momentum in Online and European Retail has continued, and a positive World Cup helped improve trends in UK Retail in the second quarter.

“The acquisition of Ladbrokes Coral completed on 28 March and the integration of that business is progressing well. We have now identified capex synergies of at least GBP 30 million in addition to the GBP 130 million cost synergies and we are well placed to deliver those savings while driving top line growth. We are gaining market share in all our key markets and we will look to reinvest to further strengthen our market position.

“The repeal of PASPA by the U.S. Supreme Court in May provides a significant new market opportunity and we are delighted to have announced a joint venture with MGM Resorts to provide sports-betting and online gaming services in the US. The combination of MGM’s leading brands together with GVC’s proprietary technology, and both businesses’ combined betting and gaming expertise, puts the Group in the best possible position to benefit from what could become the world’s largest regulated sports-betting market.

“Our strategy to build scale and diversification through organic growth and acquisition is more relevant today than ever. Gaming regulation continues to evolve globally creating both opportunities and challenges, with barriers to entry rising all the time. Against this backdrop, GVC is well positioned to continue to create further shareholder value. We also recognise the importance of corporate social responsibility and in particular that actions speak louder than words. Over the coming months we will announce a number of new initiatives across all areas of CSR.

“We have announced an interim dividend of 16 pence, 10 per cent ahead of last year, and the positive performance of the Group in the first half means that we are confident of delivering a full year result in-line with the Board’s expectations.”

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