GVC Holdings released an H1 trading update on Monday, with CEO Kenneth Alexander reporting that the integration of its newly acquired Sportingbet operations is progressing better than expected. In a deal that was struck in December and finalized earlier this year, GVC teamed with UK bookies William Hill on a £492.5m acquisition of the Sportingbet operations, with Hills taking the Australian and Spanish businesses, while GVC took Sportingbet’s operations in Denmark and other more ‘grey’ markets like Germany.
Alexander reported that Sportingbet’s turnover rose 12% over H1 2012 to €2.4m per day, while daily average revenue is up 8% to €266k on 7.9% margins. Following a review of the business, GVC cancelled “unnecessary” IT projects and outsourced infrastructure to more cost-friendly jurisdictions. GVC also cancelled all poor-performing acquisition marketing and corporate sponsorships, implemented “much tighter” expenditure controls and “flattened” Sportingbet’s organization structure. Alexander claims these and other cost-cutting measures are on track to reduce Sportingbet’s inherited cost base by close to 40% before the end of the year, by which time the business is also expected to be profitable.
As for GVC’s other operations, its B2B arm turned in daily average revenue of £204k per day. GVC’s German-language B2C brand CasinoClub saw revenues rise 10% to €86k per day while Betboo, GVC’s Turkish- and Latin American-targeted brand, saw daily revenue rise 25% to €35k. GVC’s overall daily average revenue hit €325k on an 11.4% sportsbook margin. Alexander said GVC’s board was “cautiously optimistic about the outcome for 2013.” Optimistic enough that GVC has decided to pay a 10.5¢ dividend per share in August.
