UK-listed online gambling operator GVC Holdings saw operating profit soar in 2014 thanks to the “resounding success” of the 2014 FIFA World Cup.
GVC, which operates the Sportingbet and Betboo brands, issued a preliminary results announcement for the year ended Dec. 31 that showed betting turnover rising 25% to €1.46b and net gaming revenue up 32% to €225m. Earnings rose 28% to €39.2m and GVC’s stock rose 1.3% on the day to close at 460p.
Sportsbook revenue was up 21% to €110.2m, 71% of which was generated by GVC’s mobile channels. Sportsbook margin was up 0.2 points to 9.8%, despite the widely cited ‘punter friendly’ football results that decimated other operators in Q4. Non-sports gaming revenue rose 26% to €114.6m.
In 2015 trading through March 18, GVC says sports wagers are up 22% over Q1 2014, net gaming revenue is up 18% to €661k per day and in-play revenue is up 19% to €300k per day. GVC CEO Kenneth Alexander said the firm “has never been in a stronger position and we look forward to 2015 and beyond with confidence.”
GVC says its €7m marketing investment into the World Cup “reaped an immediate benefit” and led to a “step change” in customer acquisition and retention. GVC also splashed out €3.3m on product enhancement in 2014, including mobile and third party games integration. GVC plans to boost its product investment budget by 50% in 2015.
Alexander expanded on his January comment that the company was eyeing some potential UK acquisitions as the market adapts to the new licensing regime. Alexander said GVC was “in a strong position to be a consolidator in the industry.” On Monday, Alexander told Reuters that GVC was considering the type of transformative acquisition similar to GVC’s 2013 addition of Sportingbet’s grey market business.
Alexander said “something like” Bwin.party would fit this transformative vision. The struggling Bwin.party is known to be discussing the potential sale of some or all of its operations but taking on the whole enterprise would be an order of magnitude far larger than the £31m GVC paid for Sportingbet.