Gala Coral sees Q1 earnings increase by 59%

Updating the market on its Q1 2016 performance (16 week ending January 2016), Gala Coral Group (Coral) have reported net revenues of £333.3 million representing a £47.1 million or 16% uplift on Q1 2014 performance. After adjusting for regulatory impacts,  Gala Coral governance reported Q1 2016 EBITDA of £23.1 million or 59% ahead of last year.

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Improved football results contributed significantly to the underlying gross profit improvement, with football margins up 7.9% on 2015.

Coral Retail EBIDTA of £40.7 million was £0.2m ahead of last year and £9.6 million or 31% ahead after adjusting for the impact of regulation. However, operating costs were £4.2m or 4% higher than last year due to estate development (+0.5%), payroll annual salary reviews and increased investment in staff training.

European betting division, Eurobet Retail EBITDA was £2.9 million or 132% ahead of last year (£3.1 million or 158% ahead on a constant currency basis). Sports stakes were 19% ahead of last year, driven by the shop optimisation programme whereby 250 shops were relocated to more profitable locations.

Online EBITDA of £18.5m was £6.6 million or 55% ahead of last year and 194% ahead after adjusting for the full year impact of Point of Consumption tax.

Connect customers now contribute over 40% of coral.co.uk total net revenue. Bet-in-Play stakes represented 48.8% of total sports stakes (excluding horse racing), while mobile accounted for 70.4% of sports stakes.

Coral.co.uk gaming net revenue of £28.2 million was £7.2 million or 34% ahead of last year with strong growth in actives (+45%). Mobile accounted for 71.3% of gaming stakes, an increase of 10.1pp from Q1 FY15.

Net debt for accounting purposes (excluding shareholder loan notes) was £826.9 million on 16th January, compared with £1,031.8 million on 26th September 2015. This decrease in net debt is largely as a result of the disposal on the sale of Gala Retail.

CarleaverCarl Leaver, Group CEO, commented on Q1 2016 performance:

“The Group posted another strong quarter of growth with EBITDA £7.9m or 14% ahead of last year. After adjusting for incremental regulatory costs, underlying EBITDA was £23.1m or 59% ahead driven by continued momentum in all divisions and improved football results.

“Online growth was strong driven by CRM-led reductions in churn and high levels of customer acquisition at market leading costs-per-acquisition. Multichannel continues to play a key role in driving both customer acquisition and retention as customers embrace the unique features of our Connect offering.

“Coral Retail saw positive OTC stakes growth and a good machines performance. Strong growth in Eurobet Retail was helped by the relocation of 250 shops to more profitable locations.

“We continue to work constructively with the Competition and Markets Authority as it progresses through phase 2 of its review of the proposed merger with Ladbrokes PLC. Timescales are in-line with our expectations, with the next key milestone being the CMA’s announcement of its provisional findings, and if required, proposed remedies, in mid-to-late April.

“A final decision is due by 24th June. In the meantime, our teams remain firmly focused on the execution of our strategy. We are confident that we are very well placed for the year ahead.”

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