UK-listed online gambling operator GVC Holdings is making it rain for shareholders after posting a positive Q3 trading update.
On Thursday, GVC announced that overall revenue hit €221.5m in the three months ending September 30, up 12% from the same period last year. Twelve was the number of the day, as both sports and gaming daily average revenue also rose 12% to €962k to €1.4m, respectively.
Sports stakes were up only 3% but margins improved 1.2 points to 10.5%. GVC says Q4 has begun positively with average daily revenue up 8% in the month of October, a “particularly pleasing” result given that Q4 was 2015’s strongest period.
GVC also announced that it planned to pay a special dividend of €10¢ per share in February 2017. GVC had taken a “dividend payment holiday” this year in keeping with the terms of the €400m loan facility provided by Cerberus Business Finance that helped GVC acquire Bwin.party digital entertainment in 2015.
In August, GVC scored a new €250m loan from Nomura International to replace its original financing “at materially lower rates of interest.” GVC says it intends to pay off the balance of its Cerberus loan (€386.5m) before February 2, 2017. Coupled with GVC’s existing cash resources and “continued positive trading,” the board saw fit to once again give shareholders a taste.
GVC CEO Kenneth Alexander (pictured) celebrated the company resuming the dividend game “ahead of schedule,” which he partially credited to the company’s “rapid integration” of the Bwin.party assets. Assuming current trends continue and no more significant acquisitions are in the works, GVC plans to resume paying 50% of annualized free cash flow to shareholders starting at the end of 2017.