TIDMGVC
RNS Number : 7548F
GVC Holdings PLC
17 July 2019
17 July 2019
GVC Holdings PLC
("GVC" or the "Group")
H1 Post Close Trading Update
GVC Holdings PLC (LSE: GVC), the global sports-betting and
gaming group, is pleased to announce a post close H1 trading
update.
Key trading highlights:
Q2(1) :
-- Continued very strong growth in Online with NGR +16% (+17%
cc(2) ) despite the comparative period including part of the
Football World Cup
-- UK Retail like-for-like ("LFL")(3) NGR -19% driven by the cut
in B2 maximum stakes to GBP2; trends better than initial
guidance
-- European Retail NGR +12% (+13% cc(2) ) with OTC wagers 8% ahead
-- Total Group NGR +3% (+3% cc(2) )
-- New Jersey full online launch on-track for the start of the 2019 NFL season in September
H1(1) :
-- Online NGR +17% (+18% cc(2) )
-- UK Retail like-for-like ("LFL")(3) NGR -10% driven by the cut in B2 maximum stakes to GBP2
-- European Retail NGR +7% (+8% cc(2) )
-- Total Group NGR +5% (+6% cc(2) )
Q2 growth (1 April to 30 H1 growth (1 January to 30
June 2019)(1) June 2019)(1)
Total Total Sports Sports Total Total Sports Sports
NGR NGR CC(2) Wagers Margin NGR NGR CC(2) Wagers Margin
------ ----------- -------- -------- ------ ----------- -------- --------
Online
Sports 19% 20% 7% +0.8pp 18% 19% 13% +0.4pp
Gaming 15% 16% 17% 18%
Total Online 16% 17% 17% 18%
UK Retail
(LFL(3) ) (19%) (19%) 8% +0.1pp (10%) (10%) 4% (0.5pp)
European
Retail 12% 13% 8% +0.7pp 7% 8% 11% (0.5pp)
Other 84% 84% 46% 46%
Total Group 3% 3% 5% 6%
Kenneth Alexander (CEO) said(4) :
"Trading in Q2 remained very strong with the Online division
delivering continued material market share gains across all major
territories. This outperformance is driven by the sustainable
competitive advantages of our proprietary technology platform,
leading product, cutting edge marketing and leading brands, all
delivered with an unrivalled understanding of the markets in which
we operate. The transition to a post GBP2 stakes-cut environment in
UK Retail is progressing very well and we believe the Ladbrokes
Coral estate is best-placed to take market share. In the US, Roar
Digital, our JV with MGM Resorts, is on-track for its full online
launch ahead of the NFL season in September. In the first half of
the year the Group was granted licences in Mississippi and Nevada,
and Roar Digital received a transactional waiver to conduct
business in New Jersey.
The Group expects an announcement in August from Hesse, the
state leading the regulatory process for online sports-betting in
Germany, detailing the requirements that will govern the new
sports-betting licences. The strong trading performance of the
Group means that any potential costs in 2019 associated with the
new sports licences are expected to be fully mitigated. The Board
therefore remains confident of delivering EBITDA and operating
profit in-line with expectations for the full year."
Current Trading Q2 Commentary:
Online:
Online NGR was 16% ahead (+17% cc(2) ) with double-digit growth
in all major territories including the UK (NGR +19%), Germany (NGR
+24% cc), Australia (NGR +38% cc), Italy (NGR +19% cc) and Brazil
(NGR +38% cc). Sports NGR was 19% ahead with sports wagers +7% and
sports gross win margin 0.8pp ahead at 11.3%. After adjusting for
the Football World Cup(5) , Online NGR was 20% ahead, Sports NGR
28% ahead and sports wagering 14% ahead. Gaming NGR was 15%
ahead.
UK Retail (LFL(3) ):
The cut in maximum B2 stakes to GBP2 in UK Retail was
implemented on 1 April 2019 resulting in a 39% year-on-year fall in
LFL machines revenue. Part-substitution of this displaced revenue
into sports-betting helped drive OTC wagers 8% ahead of last year -
a 13pp improvement on long-term trends. OTC gross win margin was
marginally ahead of last year.
European Retail:
European Retail NGR was 12% ahead of last year (+13% cc(2) )
with double-digit growth in all territories.
IFRS 16:
The new financial reporting standard for leases, IFRS 16,
applies to financial periods commencing on or after 1 January 2019.
For leases previously classified as operating leases, a right of
use asset and lease liability will be recognised going forward.
The Group has today issued guidance on its proposed application
of IFRS 16. A summary of the methodology applied, the estimated
impact on existing profit metrics and balance sheet metrics, and
historic proformas disclosing EBITDAR can be found here:
https://gvc-plc.com/wp-content/uploads/2019/07/IFRS16.pdf
IFRS 16 will have a material impact on the Group's existing
profit metrics. Based on the Group's current planned shop closures
and lease renewal profile in response to the Triennial Review, the
anticipated impact of IFRS 16 on existing profit metrics in FY19 is
as follows:
-- Online EBITDA cGBP10m higher
-- UK Retail EBITDA cGBP70m higher
-- European Retail EBITDA cGBP10m higher
-- Group Depreciation and Amortisation cGBP60m higher
-- Group Finance costs cGBP15m higher
-- Group Profit before tax cGBP15m higher
Balance sheet anticipated impact:
-- Net debt cGBP380m higher (The banking definition of net debt is not impacted by IFRS 16)
Cashflow is not impacted.
Any changes to current expectations on UK Retail closures and /
or a change in the proportion of expired leases would result in a
different impact to that stated above.
Notes
(1) The Group's proforma results are unaudited and presented as
if the current Group, post acquisition of the Ladbrokes Coral Group
plc, had existed since 1 January 2018. The results of Crystalbet
and Neds are included from the date of acquisition (11 April 2018
and 28 November 2018 respectively)
(2) Growth on a constant currency basis is calculated by
translating both 2019 and 2018 performance at the 2019 exchange
rates
(3) UK Retail numbers are quoted on a LFL basis. During Q2 there
were an average of 3,399 shops in the estate, compared to an
average of 3,562 in the same period last year. During H1 there were
an average of 3,432 shops in the estate, compared to an average of
3,563 in the same period last year
(4) References to profit expectations are made pre any IFRS16 adjustments
(5) Football World Cup NGR post substitution
- ends -
LEI: 213800GNI3K45LQR8L28
Enquiries:
GVC Holdings PLC
Kenneth Alexander, Chief Executive Officer
Rob Wood, Chief Financial Officer
Paul Tymms, Director of Investor Relations & Corporate Communications (investors@gvc-plc.com)
Media enquiries:
Buchanan Communications
David Rydell/Jamie Hooper/Hannah Ratcliff Tel: +44 (0) 20 7466 5000
Forward-looking statements:
This announcement contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this announcement and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
our results of operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this announcement and, unless otherwise required by
applicable law, the Company undertakes no obligation to update or
revise these forward-looking statements. Nothing in this
announcement should be construed as a profit forecast. The Company
and its directors accept no liability to third parties in respect
of this document save as would arise under English law.
About GVC Holdings PLC:
GVC Holdings PLC is one of the world's largest sports-betting
and gaming groups, operating both online and in the retail sector.
The Group owns a comprehensive portfolio of established brands;
Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes,
Neds and Sportingbet; Games Brands include CasinoClub, Foxy Bingo,
Gala, Gioco Digitale, partypoker and PartyCasino. The Group owns
proprietary technology across all of its core product verticals and
in addition to its B2C operations provides services to a number of
third-party customers on a B2B basis. The Group has also entered
into a joint-venture with MGM Resorts to capitalise on the
sports-betting and gaming opportunity in the US. The Group,
incorporated in the Isle of Man, is a constituent of the FTSE 250
index and has licences in more than 20 countries, across five
continents.
For more information see the Group's website:
www.gvc-plc.com
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END
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