GVC raises full-year guidance after strong H1

GVC Holdings has upgraded profit guidance for 2019 for the second time, after making “very good progress in the first half of the year”.

London-listed betting and gaming operator has reported a ‘Pro-forma’ revenue of £1.81 billion (€1.96bn). This represents a 5 per cent year-on-year rise if Ladbrokes Coral’s pre-acquisition figures were included, and 61 per cent if its results were factored in from the date the acquisition. Ladbrokes Coral deal was closed on 28 March 2018 and worth more than £4 billion.

This was driven by the strong performance of GVC’s online business, which saw revenue rise to £1.02bn in the first half. Net gaming revenue (NGR) accounted for the majority (£574.6m) of the total, up 17 per cent year-on-year, with sports revenue rising to £462.3m.

Growth in the operator’s online and European retail businesses helped to offset a decline in fixed-odds betting terminals (FOBTs) revenue in UK retail which was impacted by the implementation of a new £2 maximum stake limit on 1 April.

The company had expected that tighter regulatory rules on the gambling machines would have an impact of around £120 million on earnings within a couple of years and would force the operator to close around 1,000 of its betting shops in the UK. GVC Holdings, however, revealed that only 900 shops would have to stop operation.

These adjustments have led to GVC upgrading its full-year guidance on EBITDA and operating profits by £10 million ahead of expectations. According to the company statement, the board now expects the group to deliver full-year 2019 EBITDA within a £650m-£670m range.

Kenneth Alexander, CEO of GVC Holdings, has also confirmed that the company will stick to its decision to not sponsor any English or Scottish football clubs, saying that the operator donated its existing shirt sponsorship of Charlton Athletic and Sunderland AFC to its charity partner Children with Cancer. The operator also intends to continue to work in collaboration with other leading operators to boost responsible gambling and player protection in the sector.