GVC Holdings profit more than doubles on strength of Sportingbet acquisition

TAGs: GVC Holdings, Sportingbet

gvc-sportingbet-profitsUK-listed online gambling operator GVC Holdings says profits more than doubled in 2013 thanks to its acquisition last year of Sportingbet’s ‘grey’ market operations. Revenue for the 12 months ending Dec. 31 rose 69% to €180.6m while earnings were up 148% to €38.3m. In December 2012, GVC and UK bookie William Hill struck a deal on a £495m tandem acquisition of Sportingbet, with Hills taking Sportingbet’s lucrative Australian and Spanish divisions while GVC took control of the company’s operations in a couple dozen other markets in which the regulatory picture was, er, less clear-cut.

Sports betting handle rose 125% in 2013 to €1.17b, of which €662m came via Sportingbet. Sports betting accounted for 52% of GVC’s overall revenue, pushing gaming revenue into minority status for the first time. In-play wagers now account for 70% of all sports bets and mobile wagering has increased nine points to 19% of sportsbook revenue. Football, tennis and basketball accounted for 90% of GVC’s sports betting handle.

GVC says the good times have continued into 2014, with Q1 revenues at “record levels.” Revenue through the first three months of 2014 is expected to top €50m, significantly outperforming the €35.6m recorded in the same period a year ago. Sports betting handle is averaging €3.8m per day – twice the figure from a year ago – with margins of 10.1%. Net gaming revenue is up 41% to €556k per day, leading management to conclude that meeting full-year market expectations won’t be a problem.

GVC CEO Kenneth Alexander said the successful absorption of the Sportingbet business represented a “milestone” for the company, creating “greater geographical diversification” as well as bumper earnings. Alexander suggested “further geographic expansion through organic growth and acquisitions” was in the cards and this would be accomplished without the need to dilute the company’s dividend, which rose 120% in 2013 to 48.5 €cents.

Geographically, the Turkish-facing B2B operation GVC acquired from Sportingbet in 2011 accounted for 30% of GVC’s overall 2013 revenue. Eastern Europe was next on the depth chart at 22%, followed by Central Europe (20%), the German-facing Casino Club brand (18%), Latin America (5%) and the UK (4%). Alexander said the company plans to make further inroads into Latin America via its Betboo and Sportingbet brands ahead of the FIFA World Cup kickoff in June.


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