Online growth to offset retail decline in GVC 2019 results

| By contenteditor
GVC Holdings, owner of the Ladbrokes Coral and bwin.party businesses, has said that it expects to post a year-on-year increase in revenue for 2019, primarily due to growth within its online division offsetting a decline in its UK retail business.

GVC Holdings, owner of the Ladbrokes Coral and bwin.party businesses, has said that it expects to post a year-on-year increase in revenue for 2019, primarily due to growth within its online division offsetting a decline in its UK retail business.

In a post-close trading update, GVC said that net gaming revenue (NGR) for the 12 months through to 31 December 2019, is likely to rise by 2% year-on-year.

Total online NGR for the period is expected to increase by 13%, with NGR from GVC’s online sports operations forecast to rise 16% and online gaming revenue 13%.

While UK retail NGR is expected to fall 12% year-on-year, as a result of the reduction in maximum fixed odds betting terminal stakes, GVC said its European retail business is likely to see NGR climb 4% for the period.

Based on these forecast results, GVC said it expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be at the upper end of a forecast of between £670m (€787.9m/$877.5m) and £680m.

GVC noted that its EBITDA forecast was made before taking into account the impact of the International Financial Reporting Standard (IFRS) 16, which provides additional guidance on accounting for leases.

“The group’s operational and financial performance in 2019 has been excellent with the strong momentum reported at Q3 continuing throughout Q4,” GVC chief executive Kenneth Alexander said.

“The performance continues to be driven by our industry-leading technology, products, brands, marketing capability, people and local execution, all of which is underpinned by our determination to spearhead the industry’s approach to responsible gaming.

“As the group continues to deliver the opportunities provided by both the Ladbrokes Coral integration and our sports betting joint-venture in the US, the board is confident that the group is well placed for a successful 2020.”

Meanwhile, GVC also published its expected results for the fourth quarter of 2019, during which NGR is forecast to remain level on a year-on-year basis.

Online NGR is set to increase 9% year-on-year in the three months through to 31 December 2019, due to an expected 12% rise in online sports NGR and 8% jump in online gaming NGR.

UK retail NGR is likely to fall by 11%, primarily due to the ongoing impact of the cut in B2 machine stakes, though GVC did note over-the-counter wagers are set to be up 17% in the period.

However, the expected UK decline would be partially offset by a forecast 5% increase in European retail NGR in Q4, with GVC noting a particularly strong performance by its Eurobet Retail arm, where wagers are likely to climb 7%.

Aside from this, GVC said that its Roar Digital US joint venture with MGM Resorts made good progress in Q4, citing an exclusive multi-year deal with Yahoo Sports as a significant step for the business.

GVC intends to release its preliminary financial results for 2019 on 5 March.

Publication of the post-close trading update comes after GVC last week also said that it will consider the potential relocation of its place of management and control – and therefore also its tax residence – from the Isle of Man to the UK.

Jay Dossetter, head of media relations at GVC, told iGaming Business that the move will increase the company’s efficiency by allowing key meetings to be based closer to its largest market.

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