Revenues down 11% but product depth helps GVC through lockdown

Further to announcing its leadership change this morning, GVC Holdings has published a H1 post-close trading statement informing investors of the firm’s performance under challenging global conditions. 

Navigating COVID-19 complexities, GVC underlined that the company was robust and decisive in implementing cost management actions to ensure that the group achieved its objective of operating at a cash neutral position during the lockdown period.

Trading under ‘extraordinary circumstances’ following the Q2 closure of its UK and European retail estates and the further postponement of global sports, GVC saw its group H1 NGR decline 11%. 

Despite its business operations being interrupted from mid-March, GVC highlighted the continued growth of its online gambling division, which saw NGR increase 19% during the H1 period.

Online gambling’s robust performance was maintained by its diverse product inventory and geographic mix, said GVC, supporting the division’s performance during the sports lockdown.

However, the post-close statement underlined the pandemic’s severe trading impact on GVC’s UK and European retail operations.

 The enforced closure of Ladbrokes Coral estates from mid-March saw UK retail like-for-like NGR decline by 86% during Q2 trading.

GVC’s retail impacts were further compounded by the Q2 closure of its Belgium and Ireland estates down 90% during the period, as group retail NGR tracked at a -50% decline for the H1 period.

Withstanding trading impacts, GVC pointed to a period of continued progress on key group directives, including Ladbrokes Coral brands being migrated onto GVC’s group technology platform.   

Furthermore, as reported this month, GVC and US partner MGM Resorts agreed to increase funding of its ROAR Digital joint-venture to $450 million, accelerating the development and prospects of its BetMGM property.

Outgoing Group CEO Kenneth Alexander commented on performance:  “All in all, our resilient performance through what has been a turbulent first half and the proven strength of our business model means that the Group can look forward to the future with confidence.” 

“It is a clear testament to the strength and diversification of our business model, the quality of our technology, the enduring appeal of our brands, and the talent, commitment and professionalism of our people. 

“We have worked hard to achieve our target of operating at cash neutral throughout the lockdown period, which has enabled the Group to retain the necessary financial strength to be able to take advantage of growth opportunities as and when they are presented to it. Our increased investment in BetMGM in the US is a case in point.”

At present, GVC expects H1 group EBITDA to be in the range of £340-£350 million. It will publish its 2020 interim results on Thursday 13 August.