Gambling Industry Acquisitions and Financial News — Weekly Round-up for March 9, 2018

Bet-At-Home Delivers Record Full Year 2017 Results

Marketing and sponsorship increase brand awareness

bet-at-home.com AG has reported a strong performance in its full year 2017 results despite significant headwinds.

The company attributes its success to investments in marketing and sponsorship initiated to increase brand awareness.

Key performance indicators include:

– Gross betting and gaming revenue increased by 4.8 percent to reach Euro 145.4 million

– Net betting and gaming revenue increased by 4.3 percent to Euro 117.8 million (FY 2016: Euro 112.9 million).

– Gross betting and gaming volumes amounted to Euro 2,174.6 million.

– EBITDA increased by 7.4 percent, to reach Euro 35.5 million.

– EBIT reached Euro 34.1 million (FY 2016: Euro 31.9 million).

– Consolidated profit for 2017 increased to Euro 32.8 million (FY 2016: Euro 31.0 million).

– Betting fees, gambling levies and VAT on electronic services increased by 7.2 percent to Euro 27.6 million compared to the previous period (FY 2016: Euro 25.8 million).

– Cash and cash equivalents and short-term time deposits amounted to Euro 101.8 million

bet-at-home hailed its performance saying it had faced significant headwinds that included the company being blocked in Poland and a rise in gambling taxes.

Looking ahead, the company expects, under existing circumstances, to achieve gross betting and gaming revenues of Euro 150 million and EBITDA of between Euro 36 million and Euro 40 million during 2018.

Bet-At-Home AG’s Management and Supervisory Board will propose the distribution of a total dividend for the 2017 financial year within the range of Euro 6.00 and Euro 8.00 per share to the Annual General Meeting in May 2018. The payment will be effected in May 2018.

Paddy Power Reports Another Sound Year

Revenues and EBITDA rise in year ended 31 December 2017

Online and land gambling group Paddy Power Betfair plc has published its prelims for the year ended December 31st 2017, highlighting:

* Revenue up 13 percent y-o-y to GBP 1,745 million, driven by 16 percent growth in sports revenue;

* Underlying EBITDA up 18 percent to GBP 473 million, higher than previous guidance range (GBP 450 million to GBP 465 million) due to favourable Q4 sports

results;

* Final dividend of 135p per share, resulting in total dividends for the year up 21 percent to 200p per share;

* Continued strong cash generation, with underlying free cash flow up 57 percent to GBP 395 million;

* European platform integration successfully completed in January 2018 and resources now focused on developing customer facing products;

* Additional c.GBP 20 million investment in marketing and customer proposition planned in 2018 to boost the Paddy Power brand in the UK and the Betfair brand in international markets;

* Leading customer propositions and continued strong performance in Australia, Retail and the US have positioned company strongly ahead of regulatory changes;

* Targeting leverage of between 1x and 2x net debt to EBITDA in the medium term to improve efficiency of the Group’s capital structure;

Peter Jackson, Chief Executive, commented Wednesday:

“The business saw continued good growth in 2017, with operating profits increasing by 19 percent. Our Australian and Retail operations performed particularly well, growing profits by over 40 percent.

“Following the successful completion of our European technology integration, Paddy Power customers are now enjoying the fastest sports book app in the market. Our considerable development resources will now be focused on bringing more new products to customers, some of which will be delivered ahead of the World Cup.

“We saw the benefits of investing in our customer propositions in 2017, with Sportsbet launching a number of product features that give extra value to customers and Betfair moving to a clear market leadership position in its football pricing. Now the Paddy Power brand is operating with an improved product, we will increase marketing spend to align with its mass market positioning and step up the retention-focused investment that we started in 2017. At the same time, we also plan to increase our investment in international markets.

“Our scale, leading customer propositions and strong balance sheet mean we are well positioned ahead of the regulatory and fiscal changes expected in the UK, Australia and the USA. Our strengths in operating efficiently and responsibly will enable us to build a business that can sustainably generate shareholder returns over the long term.”

GVC Achieves Unanimous Shareholder Support For Ladbrokes Coral Acquisition (Update)

Third major acquisition in the last five years takes online gambling group into the big time

Business media reports from London Thursday revel that online gambling group GVC Holdings plc has received almost total shareholder support for its proposed acquisition of rival Ladbrokes Coral in a clever deal that takes into account possible cuts to the maximum betting rates that may be imposed by government on the controversial Fixed Odds Betting Terminals (see previous InfoPowa reports).

The machines are a crucial part of profits in high street bookmaking stores and fears have been rising that ministers will slash the stake limit to such an extent as to make normal business unviable. GVC has worked around this with a contingent variable rate – effectively a sliding scale of how much the acquirer would pay for its target – based on the outcome of the Government review.

GVC will now pay roughly GBP 3.2 billion for Ladbrokes Coral in cash and shares after receiving 99.9 percent backing from its shareholders for the purchase. It will pay nothing more if FOBT stakes are cut to GBP 2 but the total deal value could rise to GBP 4 billion if the Government only reduces stakes to GBP 50. The deal is expected to complete later this month.

In recent years GVC has added major companies like Sportingbet, PartyPoker and Bwin to its list of subsidiaries.