UK-listed gambling operator Gala Coral Group posted a modest revenue gain in its fiscal year, as a strong performance by its online operations helped offset retail stagnation.
For the 12 months ending Sept. 26, Gala Coral reported revenue up 6.4% to slightly over £1b, while earnings rose 1.3% to £205.3m. Company CEO Carl Leaver claims earnings would have risen 30% once you factor out the impact from last year’s FIFA World Cup and the introduction of the UK’s online 15% point-of-consumption tax (POCT).
Gala Coral’s online operations reported revenue up nearly 36% to £247.8m, while online earnings rose a more modest 13.5% to £56.2m thanks to the aforementioned POCT. Again waving his theoretical wand, Leaver said online earnings would have been double that of the previous fiscal year were it not for those pesky regulatory and seasonal headwinds.
Online gains were strongest at Coral.co.uk, which reported revenue up nearly two-thirds to £119m as active customers increased by one-fifth. Sports betting revenue improved by £16.9m while gaming revenue rose by £28.8m. Coral credited the online gains to more betting options, a stronger cross-sell from sports into gaming and higher multi-channel activity.
Gala-branded sites reported revenue up 23% to £92m as active customers rose 10%. Galabingo.com was responsible for most of the gains, rising £28% to £78m thanks to an increased focus on VIP customer service. In contrast, Galacasino.com revenue was up just 2% to £13.1m thanks in part to a reduction in VIP spending.
Revenue at the Italian-facing Eurobet.it was up 8% to £37m as actives rose 3%, although poor football margins spoiled a 90% rise in sports betting stakes. Eurobet.it maintained its market share of around 10% despite the entry of Bet365’s Italian site.
At the retail level, Coral betting shop revenue was flat at £676m, as a 4% rise in gaming machine revenue was offset by a 5% decline in OTC betting. The company said OTC wagering fell 2% thanks to the lack of a World Cup and reduced activity by a single high-rolling bettor.
Poor Italian football results pushed Eurobet retail revenue down 7% to £77.3m despite stakes rising 23%. Sports revenue was down 14% to £47.5m but virtual sports betting rose one-third to £24m, although vertical wagering softened during Q4 as Italian bettors shifted more of their cash to traditional sports bets, particularly on in-play wagers.
The results are Gala Coral’s final standalone annual report card before the company’s imminent merger with erstwhile rival Ladbrokes. Leaver told analysts that the union was “a great deal” for both firms, despite Ladbrokes investor Dermot Desmond’s criticism of the union as principally benefiting Gala Coral’s hedge fund owners.
In other Gala Coral news, the company’s COO Shay Segev has left to take up a similar role with GVC Holdings. Segev, who joined Gala Coral in July after a stint with gambling technology firm Playtech, will officially begin his new job on March 1, 2016, about one month after GVC’s acquisition of Bwin.party digital entertainment is expected to be finalized.
