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Cancelled horse races cause GVC's betting shops to stumble

A host of cancelled horse races due to adverse weather caused GVC’s betting shops to stumble at the start of this year but the might of its online business more than countered the impact.
Boss Kenny Alexander said that in the first 20 weeks of the year, the group’s high street shops, which it acquired in the takeover of Ladbrokes Coral, suffered a 5pc drop in net gaming revenue - the amount of money the company records in sales once punters’ winnings have been deducted.
Mr Alexander said that with more than one in 10 of all planned horse racing fixtures cancelled in 2018, the Ladbrokes betting shops suffered in particular. A strong run of wins by the bookmaker at the end of 2017 also dampened punters’ enthusiasm for placing multiple bets for fear they would lose again.
However online the company performed strongly with online net gaming revenue up 17pc thanks to a flurry of betting activity on sports. A resurgence in its casino gaming division also helped with net gaming revenue on its Partypoker website up 41pc.
Cancelled horse races cause GVC's betting shops to stumble

GVC boss Kenny Alexander reckons he can now cut costs by at least ?130m a year by 2021 once Ladbrokes Coral is fully integrated

Credit:
David Rose
Shares rose nearly 2pc to ?10.03 on the back of the numbers, as investors were reassured by Mr Alexander confirming the likely impact from the Government’s decision to slash maximum stakes on fixed odds betting terminals from ?100 to ?2.
The chief executive expected earnings before interest, taxes, depreciation and amortisation to suffer a ?160m hit in the first year of the stake cuts but that after this it will drop to ?120m.
“Therefore, we expect to retain a profitable and highly cash generative UK retail estate,” Mr Alexander said.
Shareholders were also cheered by Mr Alexander’s prediction that he would be able to ramp up cost savings by a third once Ladbrokes Coral was fully integrated into GVC.
GVC
Previously, he had expected to be able to save ?100m in costs per year by 2021 but now - just two months after the deal completed - suggested this would be “at least ?130m”.
"It is very early days since the completion of the acquisition of Ladbrokes Coral, but from what I have seen so far I am excited about the opportunities and even more confident of delivering shareholder value,” Mr Alexander said.
In terms of the US, where a major legal decision by the Supreme Court saw a near nationwide ban on sports betting overturned, Mr Alexander said this “presents the potential for a significant expansion" in the regulated sports betting market.
“Through Stadium, the group is already the leading B2B provider of sportsbook technology in Nevada, whilst in New Jersey GVC technology supports MGM online casino and poker offerings,” he said.
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