GVC Holdings PLC Strong momentum in Online and European Retail has continued

GVC Holdings PLC
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GVC Holdings PLC (LON:GVC), the multinational sports-betting and gaming group, today announced its Interim Results for the six months ended 30 June 2018.

Group

Reported1

Proforma2

Six months to 30 June

2018

2017

2018

2017

Change

Constant currency3

£m

£m

£m

£m

Net gaming revenue (NGR)

1,125.1

386.6

1,717.0

1,591.0

8%

8%

Revenue

1,105.9

374.8

1,694.3

1,572.8

8%

8%

Gross profit

763.2

272.4

1,163.4

1,098.2

6%

Underlying EBITDA4

235.0

100.7

349.5

314.1

11%

Underlying operating profit5

188.6

78.6

277.9

236.9

17%

Underlying profit before tax5

162.1

64.4

Profit / (loss) after tax

113.8

(6.4)

Diluted EPS (p)

24.9

(2.1)

Adjusted diluted EPS6 (p)

32.2

24.7

Dividend per share (p)

16.0

14.6

 

Financial highlights (proforma basis2)

· Proforma Group NGR up 8% at £1,717.0m

· Proforma Group revenue up 8% at £1,694.3m

· Proforma Group underlying EBITDA4 up 11% at £349.5m

· Proforma Group underlying operating profit5 of £277.9m up 17%

· Adjusted diluted EPS6 of 32.2p up 30%

· Interim dividend of 16.0p per share (H1 2017: 14.6p)

· Adjusted net debt at 30 June 2018 of £1,887.0m (2.69x LTM underlying EBITDA)

Operational highlights (proforma basis2)

· Good momentum in Online with market share gains in all key territories; NGR up 18% (+20% in constant currency (“cc”)3); Sports brands +19% (+21% cc3) and Games brands +13% (+15% cc3)

· UK Retail like-for-like7 NGR -3%; a good World Cup helping offset the impact of poor weather in first half

· European Retail NGR +29% (+26% cc3) 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 £30m now identified. Integration progressing well and on target to achieve at least £130m cost synergies by 2021.

Update and Current Trading2 (Q3 for period 1 July 2018 to 2 September 2018)

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

· Strong current trading: Group proforma NGR +14% with strong growth in Online (NGR +30%) and European Retail (NGR +26%)

· Product development and marketing driving continued market share gains

Kenneth Alexander (CEO) said:

“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 £30m in addition to the £130m 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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