Interactive
UK – GVC makes loss after being hit with £434.2m of additional charges
By Phil - 5 March 2019
GVC enjoyed a ‘transformational’ year in 2018, buying British bookmaking giant Ladbrokes and breaking into the US market.
The company also grew its gaming revenue in 2018 to £3.5bn leading to an £18.9m pre-tax loss compared to a loss of £22.6m last year.
GVC highlighted that it had been hit with £434.2m of additional charges, including an impairment loss of £41.3m, due to new legislation in the UK, costs incurred through buying Ladbrokes and backdated taxes in Greece
The headline story of the year was of course GVC’s purchase of Ladbrokes Coral in March for £4bn. GVC made huge progress stateside with the launch of a joint venture online and land-based sports betting partnership.
GVC grew its online operations by 19 per cent which offset a three per cent downturn in the company’s land-based betting operations in the UK. It expects 1,000 betting shops to close in the UK. The picture in Europe was more rosy with European retail increasing by 16 per cent.
Kenny Alexander, GVC CEO said: “2018 was a transformational year for the group, with the completion of the Ladbrokes Coral acquisition in March making the group the largest online-led sports betting and gaming operator in the world. Excellent operational execution, effective marketing and a good World Cup helped both the legacy GVC and the acquired Ladbrokes Coral businesses perform ahead of expectations and materially ahead of the market, delivering market share gains in all our major territories.”
Peel Hunt analyst Ivor Jones said: “Group profits are going to fall, albeit somewhat offset by synergies, and work on restructuring will continue. But the valuation multiples are undemanding and online, the key growth driver, has today again shown its trading momentum.”
With one eye on Brexit, GVC said it would operate its EU business under its Maltese gambling licenses, that it would continue to be headquartered in Gibraltar but that it would relocate its online servers to the Republic of Ireland.
Its headquarters will remain in Gibraltar; GVC said it had made contingency arrangements to help employees who live in Spain but work in Gibraltar, should there be a “significant increase in delays” crossing the border after Brexit.
