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UK – Gala Coral pushes revenues up six per cent

By - 2 December 2013

The new streamlined Gala Coral has seen turnover increase over the last year although EBIDTA has been hit by difficult trading in Q4, with sports results and the hot weather seeing EBIDTA slide by £16.7m.

Turnover was six per cent ahead of last year with gross profit coming in at £20.5m or three per cent ahead of last year, reflecting growth in all continuing businesses except Gala Retail.

EBITDA was £20.7m or nine behind last year, primarily as a result of Coral Retail gross profit was £8.7m or two per cent ahead of last year, driven by new shop openings, and the launch of new products and initiatives including the rollout of new Infinity machines.

Carl Leaver, Group Chief Executive of Gala Coral Group, commented: “In light of the difficult trading conditions, especially in Q4, the Group posted a satisfactory performance in the year, with gross profit ahead in all our businesses with the exception of Gala Retail. Performance in the year to Q3 was resilient, but a prolonged period of abnormally hot weather in Q4 resulted in reduced footfall in the UK Retail businesses. This, combined with poor sports results (primarily football), resulted in a material adverse impact on Q4 EBITDA. These trends are consistent with those highlighted by our competitors. However, trends in the new financial year have been more positive with results and customer volumes returning to more normal levels, and encouraging growth in our online businesses.”

Eurobet Retail gross profit was £2m or 15 per cent ahead of last year. Sports stakes were £17.5m or 13 per cent higher, as a result of the relocation of underperforming licences to areas with higher footfall.

Gala Retail gross profit however declined by seven per cent due to continued lower admissions.

The online businesses demonstrated strong gross profit growth, up £25.8m or 38 per cent versus last year. Actives grew across all websites, with 81 per cent growth on Coral.co.uk, 40 per cent on Eurobet.it, 21 per cent on Galabingo.com and 186 per cent on Galacasino.com.

The sale of 19 UK casinos to Rank Group for £179m saw net debt at the end of FY13 of £1,149.2m, an improvement of £172.8m since the year end.

Gala has also reclassified its residual four UK casinos as discontinued operations as the disposals of these assets are expected to complete in the coming weeks.

Gala Bingo saw an eight per cent reduction in admissions led to a gross profit decline of £14.8m or seven behind the prior year. Machines held up (relatively) well with spend per head increasing by seven per cent on the prior year resulting in gross profit only £1.4m or two down on a like-for-like basis.

Q4 saw the launch of our ‘Price Smash’ initiative in which prices have been reduced and fixed prize boards introduced in order to attract admissions. Early results have been positive and a wider roll-out is underway.

Through tight cost control, management reduced operating costs by £6m. However, this saving was mostly offset by the introduction of MGD (£3.5m) and inflationary cost pressures on property and utility costs.

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