GVC shows global depth countering UK retail realities

FTSE100 GVC Holdings Plc has this morning published its ‘post-close’ interim H1 2019 trading update, citing strong online growth as the company continues to adjust to UK FOBTs retail realities.

Despite competing against a tough comparative period featuring World Cup 2018 trading, GVC maintained its digital momentum to record a group H1 2019 NGR of +17%, helping the firm to period H1 revenue growth of 5%.

Highlighting a number of digital efficiencies, GVC governance cites that during the trading period it was able to maintain ‘material market share gains across all major operating territories’ including UK (NGR +19%), Germany (+24%), Australia (+38%), Italy (+19%) and Brazil (+38%).

Kenneth Alexander – GVC Holdings

“This outperformance is driven by the sustainable competitive advantages of our proprietary technology platform, leading product, cutting edge marketing and leading brands, all delivered with an unrivalled understanding of the markets in which we operate,” said Kenneth Alexander, Group Chief Executive at GVC Holdings.

At a retail level, H1 2019 saw the UK government implement its FOBTs £2 wagering reduction from 1 April 2019, resulting in a 39% year-on-year decline in retail machines revenue.

However focusing on retail adjustments, GVC highlights that shop management have focused on ‘substituting displaced revenues into sports betting’, which has seen the division gain a period 4% increase in OTC revenues.

“The transition to a post £2 stakes-cut environment in UK Retail is progressing very well and we believe the Ladbrokes Coral estate is best-placed to take market share,” Alexander added.

Despite having undertaken a number of UK adjustments during H1 2019 trading, GVC governance maintains confidence in delivering the group’s full-year EBITDA and operating targets.

The FTSE group looks forward to a busy second half of year, in which it will launch its US MGM strategic joint venture ROAR Digital in time for the start of the 2019/2020 NFL Season. Furthermore, GVC continues to eye further market expansions within regulated European markets.

“In the US, Roar Digital, our JV with MGM Resorts, is on-track for its full online launch ahead of the NFL season in September,” said Alexander. “In the first half of the year the Group was granted licences in Mississippi and Nevada, and Roar Digital received a transactional waiver to conduct business in New Jersey.

“The Group expects an announcement in August from Hesse, the state leading the regulatory process
for online sports betting in Germany, detailing the requirements that will govern the new sports-betting
licences.”

GVC – 2019 – H1 ‘Post Close Trading Statement’

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