Digital confidence sees GVC up 2019 profits guidance

A combination of continued online growth and better than expected UK retail performance has allowed FTSE online gambling group GVC Holdings to upgrade its full-year corporate guidance.

Citing market share gains across all major territories, the group recorded group ‘pro-forma’ revenues of £1.8 billion up 5% on corresponding H1 2018’s £1.7 billion.

During the trading period, GVC’s enlarged multi-regional online gambling division hit the £1 billion revenue mark, contributing a further underlying EBITDA of £241 million.

“Online momentum remains very strong with proforma NGR 17% ahead, delivering continued market share gains across all major territories,” said Kenneth Alexander, Group CEO of GVC Holdings.

“Our online operating model is proving highly effective, building on the sustainable competitive advantages of our wholly-owned technology platform, leading product, cutting-edge marketing, leading brands and local execution, which are all delivered with an unrivalled understanding of the markets in which we operate.”

Updating investors, GVC said that anticipated UK retail ‘triennial review’ impacts and further ‘incremental online taxes’ had been mitigated ‘better than expected’ with the company declaring a 7% pro-forma EBITDA decline to £323 million.

Posting operating profits on a ‘reported basis’, GVC saw its profits before tax fall to £2 million, with the FTSE firm attributing £184 million in exceptional item costs attached mostly to the amortisation of Ladbrokes Coral assets.

Alexander added: “In UK Retail, efficient execution of mitigation plans resulted in a Triennial Review impact that was better than initial expectations, with like-for-like NGR 10% behind last year, prompting a further upgrade to our Triennial Review EBITDA guidance. European Retail proforma NGR was 7% ahead with good growth in all territories.”

Effective H1 2019 adjustments have led to GVC upgrading its full-year guidance on EBITDA and operating profits by £10 million ahead of expectations.

“The strong trading performance of the Online business means that any potential costs in 2019 associated with the new sports-betting licences in Germany are expected to be fully mitigated,” concluded Alexander.

“With the outperformance in UK Retail, and Online and European Retail trading in-line with expectations, the Board now expects the Group to deliver full year 2019 EBITDA within a £650m-£670m range.”

GVC Holdings – Interim H1 2019 – Performance Overview 

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