GVC Holdings has solid H1 after whipping Bwin.party brands into shape

gvc-bwin-party-betting-brandsUK-listed online gambling operator GVC Holdings says it plans to resume raining dividends on shareholders following a solid H1 performance.

In the six months ending June 30, GVC says pro forma numbers – which treat GVC’s mid-2015 acquisition of Bwin.party as if it was already under the GVC tent in H1 2015 – saw revenue rise 8% to €432m and earnings improve 42% to €104.4m. Adjusted profit before tax more than doubled to €51.3m.

Turnover at GVC’s sports betting brands (Bwin, Sportingbet) gained 4% to €2.33b while keeping marketing spending to 21% of net revenue. Mobile numbers were particularly strong, with sports turnover up 55% while casino and games nearly doubled. Sports revenue was up 10% to €163.4m while gaming was up 20% to €157.2m

The Bwin.party sports labels benefited from a higher margin – 10% vs. 7.7% in H1 2015 – but GVC claims the figures also benefited from improved trading and risk management, including “the deliberate strategy to exit some unprofitable turnover.” GVC says it also convinced more Bwin bettors to try their luck in the site’s gaming verticals, resulting in a 27% rise in Bwin casino revenue.

GVC’s gaming labels (Foxy Bingo, PartyPoker, PartyCasino and Gioco Digitale) reported a 6% revenue decline to €103.7m. GVC blamed the decline on increased taxes in Germany and Austria. On a positive note, GVC said PartyPoker revenue was ahead of H1 2015 in constant currency terms, suggesting that the product had “stabilized” after “a number of challenging years.”

GVC said 70% of its H1 revenue came from regulated markets or those that are “in the process of becoming regulated or where we pay gaming taxes or VAT.”

GVC says the positive H1 momentum has continued in the first 11 weeks of H2, with average daily revenue up 12%. GVC expects its full-year results to come in at the upper end of market expectations and the company is committed to resuming dividend payments in 2017.

GVC says it’s on track to complete the assimilation of Bwin.party by the end of Q2 2017 and to realize the full €125m in synergies it promised at the time of the acquisition. Ongoing capital expenditure requirement of the enlarged group is expected to be one-third below the €64m spent in 2015.

GVC CEO Kenneth Alexander told Gambling Insider that the company had “no plans to sell off any more assets,” pouring cold water on rumors that the company was looking to offload Foxy Bingo. Alexander said “in terms of various brands, be it sportsbook, casino, poker, bingo brands, there is absolutely no intention of any disposals in that area.”

GVC also announced that it had enlisted Paul Miles, chief financial officer for payday loan outfit Wonga, as a replacement for exiting CFO Richard Cooper, who is leaving to pursue “private business interests.” Miles will assume Cooper’s CFO seat in February.