Trading Update From GVC Holdings
Group reports “very pleasing” performance, with momentum continuing across the Online and European Retail divisions
Online and retail gambling group GVC Holdings plc has posted its Q3-2018 trading update for the period 1 July 2018 to 30 September 2018, highlighting:
- Continued strong growth and market share gains in all major territories;
- Online NGR up 28 percent y-o-y;
- Sports brands NGR up 31 percent;
- Games brands NGR up 19 percent;
- UK Retail like-for-like NGR down 2 percent helped by a good second half of the World Cup;
- European Retail NGR up 24 percent with strong growth in Italy;
- Total Group NGR up 14 percent y-o-y;
- Integration of the Ladbrokes Coral businesses progressing well
Key highlights year-to-date:
- Group NGR up 10 percent with Online NGR up 21 percent and European Retail NGR up 28 percent;
- The Group remains in-line with its expectations for the year
Chief executive Kenneth Alexander reported:
“The Group’s performance in the quarter was very pleasing with momentum continuing across the Online and European Retail divisions. As highlighted in our H1 results, we will look to consolidate our position in markets where we are taking market share through the reinvestment of excess returns, and the board is confident in its full year expectations.
“We believe our sports-betting joint venture with MGM is best placed to be the market leader in the US and we have taken the first steps on that journey with the soft-launch of our sports-betting app in New Jersey. We have also recently announced a series of CSR measures including a multi-million pound commitment to responsible gambling initiatives and a call for a pre-watershed ban of TV advertising in the UK around football and other live sports.
“The industry continues to evolve and whilst there are challenges there are also many exciting opportunities. Through our proprietary technology, portfolio of brands, leading product and talent, GVC is well placed to continue to deliver shareholder value.”
Alexander said that online NGR was driven by strong growth across all major territories and helped by a good end to the World Cup. After adjusting for the estimated impact of the World Cup and the acquisition of Crystalbet, Online NGR was 21 percent ahead.
“Sports brands NGR grew 31 percent, with sports wagers 16 percent ahead and sports margin up 0.8pp. Legacy GVC brands continued their strong growth with NGR up 43 percent driving significant market share gains across our major territories; NGR was 30 percent ahead in Germany, up 14 percent ahead in Italy and 13 percent ahead in Brazil, driven by leading product, good customer user experience and innovative brand marketing.
“The Crystalbet business continues to grow strongly contributing 10pp to the legacy GVC sports brands NGR growth and 4pp to overall sports brands NGR growth. Growth in the acquired Ladbrokes Coral brands was also strong; in the UK both Ladbrokes.com up 23 percent and Coral.co.uk up 29 percent posted very pleasing NGR growth with sports wagering 9 percent ahead, and sports margin up 1.3pp helped by a particularly strong margin in September. In Italy, Eurobet.it NGR was 21 percent ahead while in Australia, Ladbrokes.com.au staking growth of 17 percent was offset by a softer margin (-0.7pp) resulting in NGR growth of 5 percent.
“Games brands NGR was 19 percent ahead with Partypoker up 43 percent benefiting from its extensive live event tournaments and continued marketing investment. Gala brands NGR and GVC casino brands NGR were both up 18 percent driven in part by strong levels of first-time-depositors.”
US operations featured the JV between GVC and MGM Resorts, which soft-launched its New Jersey Android mobile app. The launch of an iOS version is imminent (and is currently awaiting Apple Store approval). Upon iOS launch, a full “playMGM” marketing campaign will commence.
The joint venture has also signed a market access agreement with the United Auburn Indian Community which in the event that California legislates sports-betting, will enable the joint-venture to access the Californian market with its brands.
The company expects the UK government to provide an update on its plans to increase Remote Gaming Duty in the Budget on 29 October 2018, and hopes for clarity on the implementation date for the cut in B2 stakes to GBP 2.
Alexander took the opportunity to announce that Rob Wood has been appointed Deputy Chief Financial Officer with immediate effect, prior to succeeding Paul Bowtell as GVC’s Chief Financial Officer following his decision to step down from the Board on 5 March 2019.
After seven years as CFO of first Gala Coral, then Ladbrokes Coral plc and now GVC, Paul Bowtell has decided to leave the Company in order to take up a role with Alchemy Partners, the private equity firm.
He will step down on 5 March 2019, when GVC expects to announce its 2018 annual results. Rob Wood has been with the Group for six years and is the CFO of the Ladbrokes Coral UK Retail business, the largest division in GVC.
Authentic Game Enters Latvian And Estonian Gambling Markets
Live roulette pioneer continues to expand into new regulated markets across Europe via latest deal with Optibet
Live casino supplier, Authentic Gaming, has entered Latvia and Estonia for the first time after signing a deal with popular online casino and sportsbook operator, Optibet, which holds around 50 percent of the market in Latvia.
The partnership means Optibet players will gain access to live roulette games streamed from the floors of luxurious casinos around the world via the supplier’s flagship Authentic Roulette platform.
This includes tables at:
- The Platinum Casino at the Radisson BLU Hotel in Bucharest
- Casino International Batumi at the Hilton Hotel (Georgia)
- The Saint-Vincent Casino (Italy)
- Royal Casino (Denmark)
- Foxwoods Resort Casino (USA)
The deal includes games from the supplier’s just-launched Live Arena Studio in Malta, containing six tables and four different game formats, including Authentic’s Blaze variant, which is set against a glitzy gameshow backdrop.
Jonas Delin, CEO of Authentic Gaming, said: “This is a breakthrough deal for us, and forms part of our strategy to enter regulated markets in Europe and beyond.
“The Latvian market is very exciting as gaming laws prohibit Latvian based live dealer suppliers from targeting the local market, but through our partnership with Optibet we can swiftly establish Authentic Gaming as the market leader in live roulette.”
Disappointing Rank Group Trading Update
Sales have fallen almost five percent year-on-year
Online and land gambling Rank Group plc posted a disappointing trading update Thursday, reporting a 5 percent year-on-year sales decline due to high rollers ditching its casinos.
The company reported a 4.9 percent year-on-year decline in comparable group revenue for the 16 weeks to mid-October, hit by a drop in sales and traffic at its casinos and bingo halls.
Takings at the company’s venues fell 6.1 percent for the four weeks to mid-October, with its chain of Grosvenor Casinos seeing a drop in like-for-like revenue of 7.2 percent as big spenders went elsewhere.
Sales at its Mecca bingo halls fell five percent as the brand failed to attract visitors.
Rank’s digital revenue climbed 1.7 percent – with Mecca’s digital sales up 6.4 percent – but more stringent customer due diligence rules hurt Grosvenor’s online offering, contributing to a 5.2 percent decline.
On the brighter side, Rank reported impressive 46 percent growth in like-for-like takings at its newly-acquired Spanish bingo house Yo Bingo. Yo Bingo, bought in May, helped total group digital revenue grow 13.5 percent.
Investors reflected their concerns as Rank Group’s share price fell two percent in early morning trading.
The company said a transformation programme has identified some cost savings for the full year, which it told shareholders would partly mitigate Grosvenor’s revenue shortfall.
Cherry Acquires Remaining Game Lounge Shares
Maximum SEK 260 million consideration
Cherry AB has acquired the remaining 5 percent of shares in affiliate firm Game Lounge Sweden AB for a purchase consideration comprising three parts and amounting to a maximum SEK 260 million.
The first part of the purchase consideration is a SEK 100 million fixed cash amount.
The second and third, amounting to SEK 160 million, are conditional on Game Lounge’s consolidated EBITDA over specified periods.