UK-listed online gambling operator GVC Holdings says it outdid its own performance expectations in 2016 and 2017 looks set to extend that hot streak.
On Thursday, GVC issued a Q4 trading update that showed net gaming revenue rising 7% to €231.3m, its highest quarterly total of 2016, despite Q2 having enjoyed a boost via the Euro 2016 football tournament.
Q4 daily sports betting handle gained 3% year-on-year to €12.8m, while sports revenue was up 5% to €904k as margins rose a full point to 9.6%. The company credited the “international diversity of our business” with helping to offset December’s “particularly punter friendly sports results in the UK” that have bedeviled GVC’s UK rivals.
GVC also got a boost from its gaming/other division, which reported Q4 daily revenue rising 9% to €1.6m (up 11% in constant currency terms). Here again, GVC credited its “proven portfolio” of brands for goosing the numbers.
With Q4 firing on all cylinders, GVC has adjusted its pro-forma FY16 revenue forecast to come in around €894m, which would represent a 9% gain (12% in constant currency) from 2015’s take, while earnings will come in “towards the upper end of market expectations.” The company will issue its final 2016 numbers on March 23.
GVC CEO Kenneth Alexander celebrated 2016 as “a landmark year” for the company thanks to the transformative acquisition of rival Bwin.party, and the return of Bwin.party brands to growth. Alexander said GVC remained on target to realize its promised €125m in acquisition-related synergies by the end of 2017.
Alexander also revealed that trading to date in 2017 has gotten off to a “particularly strong start,” with January’s pro forma daily revenue up 21% year-on-year. The company will issue its previously announced special dividend of 12.5p per share on February 14.
Late last year, GVC was rumored to be among the companies pondering a play to acquire Canada’s Amaya Gaming, the parent company of PokerStars. While that deal ultimately failed to materialize, Alexander said GVC remains “alive to further industry consolidation.”
GVC shored up its balance sheet by repaying its outstanding €386m loan to Cerebus Business Finance through a combo of cash on hand and drawing down a €250m loan from Nomura International. GVC said the transaction will cut its interest payments by around €40m in 2017.