TIDMGVC
RNS Number : 2093P
GVC Holdings PLC
09 October 2019
9 October 2019
GVC Holdings PLC
("GVC" or the "Group")
Q3 Trading update
Full year EBITDA guidance upgraded
GVC Holdings PLC (LSE: GVC), the global sports-betting and
gaming group, is pleased to announce a trading update for the
period 1 July 2019 to 30 September 2019.
Key highlights Q3(1) :
-- Full year pre-IFRS16 EBITDA guidance range upgraded to
GBP670m - GBP680m (from GBP650m - GBP670m)
-- Continued strong growth in Online with NGR +12% despite the
comparative period including part of the Football World Cup
-- Trends in UK Retail remain ahead of initial guidance, with
like-for-like ("LFL")(2) NGR -18%, driven by the cut in B2 maximum
stakes to GBP2
-- Encouraging start in the US following the launch of the BetMGM mobile app in New Jersey
-- Successful refinancing of EUR1,125m debt
-- Launch of the GVC Global Foundation, which will coordinate
and support GVC's CSR initiatives and donations around the
world
Q3 growth (1 July to 30 Sept YTD growth (1 Jan to 30 Sept
2019) 2019)(1)
Total Total Sports Sports Total Total Sports Sports
NGR NGR CC(3) Wagers Margin NGR NGR CC(3) Wagers Margin
------ ----------- -------- -------- ------ ----------- -------- --------
Online
Sports 16% 15% 5% +1.0pp 17% 18% 10% +0.6pp
Gaming 8% 7% 13% 13%
Total Online 12% 11% 15% 15%
UK Retail
(LFL(2) ) (18%) (18%) 7% (0.3pp) (13%) (13%) 5% (0.4pp)
European
Retail (4%) (5%) (1%) (0.6pp) 4% 4% 7% (0.5pp)
Other 31% 31% 41% 41%
Total Group (1%) (2%) 3% 3%
Kenneth Alexander (CEO) said:
"I am delighted that the Group's financial performance has
allowed us to upgrade our full year EBITDA expectations again.
Online momentum remains strong across all major territories, with
NGR up 12% in the quarter despite the prior period containing part
of the World Cup. This performance continues to be driven by our
industry-leading technology, products, brands, marketing
capability, and people.
The launch in September of the BetMGM app in New Jersey, powered
by the GVC technology platform, is a key milestone, and our US
sports-betting joint venture with MGM Resorts remains very
well-placed to capitalise on the US sports-betting opportunity. The
integration of the Ladbrokes Coral businesses is progressing well
with the migration of the Ladbrokes, Coral and Gala online brands
due to commence in Q4 and complete by the end of H1 2020.
Finally, we were delighted to recently launch the GVC Global
Foundation, which will coordinate and support GVC's CSR initiatives
around the world. This should be taken as a clear sign of our
determination to spearhead the gambling industry's approach to CSR
initiatives, particularly with regard to responsible gambling".
Q3 Trading commentary
Online:
Online NGR was 12% ahead with strong growth in all territories.
After adjusting for the impact of the World Cup(4) in the prior
year, Online NGR was 14% ahead. Sports wagers were 5% ahead and
sports gross win margin was 1.0pp ahead, resulting in sports NGR up
16%. After adjusting for the impact of the World Cup(4) , sports
wagers were 9% ahead and sports NGR was 22% ahead. Gaming NGR was
8% ahead despite the prior year benefiting from high levels of
World Cup cross-sell into gaming.
UK Retail:
UK Retail trends following the cut in maximum B2 stakes to GBP2
on 1 April 2019 remain ahead of expectations. Like-for-like OTC NGR
was 7% ahead of last year driven by the part-substitution of
displaced machines revenues. Like-for-like machines NGR was 36%
behind, as a result of the B2 machines stakes cut. A further 41
shops were closed during the period, taking the total closed as a
result of the Triennial Review to 198. The Group expects to close a
total of up to 900 shops across the next two years.
European Retail:
European Retail NGR was 4% behind last year. OTC NGR was 4%
behind, with OTC margin down 0.6pp and OTC wagers down 1%. After
adjusting for the impact of the World Cup(4) in the prior year, OTC
wagers were 3% ahead and OTC NGR was flat.
Regulation
There have been no material developments to the regulatory
position in Germany since the Group's H1 update on 15 August 2019.
In summary, if clarity on the new interim sports-betting licences
is not provided in 2019 then the likelihood of delays to the
issuance of sports-betting licences in 2020 increases, and the
probability of legal challenges impacting the interim licence
roll-out is heightened. There is, therefore, a realistic
possibility that the regulatory position will not be resolved until
2021, when positive re-regulation of the German online
sports-betting and gaming market is expected.
In Brazil, the Brazilian Finance Ministry has provided further
details on its plan to regulate sports- betting. Future regulation
is intended to be an open licensing system with an unlimited number
of licences, with licensees subject to a 1% turnover tax. The
Brazilian sports-betting market is expected to regulate in late
2020 or early 2021.
Refinancing
In September the Group completed the refinancing of GBP175m and
EUR925m of its term loans with one bigger and more liquid tranche
of EUR1,125m maturing in March 2024. The new EUR term loan, which
was allocated at par, has pricing of EURIBOR +250bps (with a 0%
floor and subject to a margin ratchet), which represents a saving
of 25bps on the EUR925m of refinanced EUR loans and c.175 bps on
the refinanced GBP175m GBP loans. The refinancing of the GBP175m
GBP loans with EUR loans provides a currency mix of debt that
better matches the financial profile of the Group following the
implementation of the Triennial Review in April 2019.
GVC Global Foundation
At the end of the quarter the Group launched the GVC Global
Foundation ("the Foundation"), which will coordinate and support
GVC's CSR initiatives, objectives and donations around the world.
The Foundation builds on the Group's existing CSR efforts, focusing
on making a positive impact on the societies and communities in
which it operates.
Launch projects for the Foundation include a partnership with
Inter Milan to encourage women's participation in football and
sports integrity initiatives in the UK, Germany and the US. In
addition, the Foundation will also administer GVC's existing CSR
projects, including its collaborations with SportsAid, EPIC Risk
Management, Gordon Moody, the US NCPG and Harvard Medical School
teaching hospital.
Further details of the specific new projects and initiatives can
be found here: https://gvcglobalfoundation.com
Chairman Successor Search
As previously disclosed, the Board is in the process of finding
a successor to current Chairman Lee Feldman, in order to comply
with changes to the UK Corporate Governance Code in respect of the
recommended maximum tenure of a Chairman. The search is well
progressed and the Board expects to make an announcement before the
end of the year.
Sportium Disposal Update
The Group is pleased to confirm that Cirsa S.A. has received
regulatory clearance regarding their acquisition of the Group's 50%
interest in Sportium Apuestas Deportivas S.A. Consequently the
transaction is expected to complete within the next two weeks, upon
which the Group will receive a consideration of EUR73.7m payable in
cash plus repayment of loans and distribution of excess cash.
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) UK Retail numbers are quoted on a LFL basis. During the
period there were an average of 3,267 shops in the estate, compared
to an average of 3,495 in the same period last year. As at 30
September 2019 there were a total of 3,233 shops in the estate
(2018: 3,481).
(3) Growth on a constant currency basis is calculated by
translating both 2019 and 2018 performance at the 2019 exchange
rates
(4) Football World Cup NGR post substitution
- ends -
LEI: 213800GNI3K45LQR8L28
Call Details:
GVC will host a conference call on 9 October 2019 at 9.00 am
(BST). Participants may join the call by dialing the following
number, approximately 10 minutes before the start of the call.
Tel: +44 (0) 20 3059 5869
Passcode: GVC Q3 Trading update
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:
Powerscourt Tel: +44 (0) 20 7250 1446
Rob Greening / Elly Williamson (gvc@powerscourt-group.com)
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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