GVC Holding’s UK Retail Decline Offset By Stand-Out Online Division

Citing market share gains across all operating territories, FTSE250-listed GVC Holdings has backed their underlying corporate strategy to navigate regulatory complexities both domestically and internationally.

GVC posted a pro-forma net income rise of 3 percent to £ 3.65bn (FY2018: £ 3.57bn) led by the strong growth of its online business and European retail portfolio, releasing its full-year 2019 results.

Despite struggling against difficult comparisons in 2018, GVC marked its online division as the standout performer, reporting a 14% rise in NGR to £ 2.17bn (FY2018: £ 1.91bn).

GVC’s online division posted an underlying EBITDA of £ 522 m (FY2018: £ 486 m), providing key technology integrations resulting in ‘ real-time CRM and improved gaming cross-selling techniques’ for gaming.

Group CEO Kenneth Alexander said: “Online once again delivered the stand-out performance, with proforma NGR growing 13% to £2,170.7m. The Group achieved double-digit pro-forma NGR growth across all of its core online markets and continued to grow share.

“Online pro-forma sports NGR was up 16% despite the tough comparison against 2018 which was boosted by the FIFA World Cup.”

GVC has retained trust in its UK retail unit, which endured a year of significant shocks including adjustment to the latest £ 2 FOBT stake cap–introduced on 1 April 2019.

Despite reporting a 3% rise in OTC wagers to £ 3.18bn (FY2018: £ 3bn), the retail division of Ladbrokes Coral announced revenue decreases across all key measures, with the UK retail NGR falling 15% to £ 1.12bn (FY2018: £ 1.32bn).

GVC outlined in its summary of the results of the division that Triennial Evaluation steps had forced it to close 245 UK shops over the year, with the company expecting a further 200 closures during Q1 2020.

Alexander further added: “The impact of the Triennial Review is estimated to have reduced UK Retail EBITDA by £118.0m in 2019, and we expect it to remain broadly at that level as further lost revenue from the annualisation of the new measures is offset by cost mitigation and competitor closures.”

GVC has seen its group-wide EBITDA fall by 10 percent to £ 678 m (FY2018: £ 755 m), covering both UK market changes and major growth costs related to its Ladbrokes Coral acquisition.

Closing its accounts for 2019, GVC Governance declared pro forma underlying profits to be £ 490 m, 20 percent lower than the corresponding £ 610 m for 2018.

The FTSE betting group, having recorded after-tax losses of £ 140 m (FY2018: £ 56 m), booked £ 710 m of costs related to’ separately disclosed items.’

Alexander concluded: “GVC has a truly global online footprint with licenses in 24 territories. This diversification provides GVC with a significant competitive advantage and enables us to spread the risk and allocate capital and resource to those markets with the most attractive opportunities. In addition to entering and growing in newer markets, the Group continues to take share in its more established markets.”