BUSINESS

GVC credit PartyPoker turnaround for driving H1 gains

TAGs: GVC Holdings, PartyPoker

gvc-partypoker-alexanderUK-listed online gambling operator GVC Holdings saw its share price hit a record high as investors celebrated the company’s stellar H1 performance.

On Thursday, GVC released its report card covering the first six months of 2017, during which gaming revenue topped €486m, a 10% rise over pro forma results – which includes a full contribution from its acquired Bwin.party brands – in H1 2016. Clean earnings rose 28% to €134m and pre-tax profits hit €102m.

The good times have continued to roll in Q3, with daily group net gaming revenue up 12% and GVC’s board says it expects full-year 2017 earnings to be “comfortably ahead” of analysts’ consensus of €256m. Giddy investors pushed the stock up nearly 7% to a record 855p on Thursday.

GVC CEO Kenny Alexander (pictured) said the company’s performance “has continued to exceed our expectations” following the Bwin.party acquisition. Moreover, Alexander said the ease with which GVC integrated the Bwin.party brands leaves the company “well positioned to play a pivotal role in the industry’s consolidation, should the right opportunities arise.”

One such opportunity reportedly passed GVC by last month, as media reports indicated the company had made an unsuccessful pitch to acquire UK rival Ladbrokes Coral. However, Alexander now says GVC “definitely” won’t do any deals until after the UK government releases the results of its triennial review of the gambling industry in another month or so.

Speculation is rife that the review will call for some reduction in the maximum stakes on the fixed-odds betting terminals in UK betting shops. It’s estimated that the worst-case scenario – a reduction from £100 per spin to just £2 – could cost the UK’s retail bookies a combined £150m in annual revenue, and Alexander told Reuters that GVC “are not going to take any risk whatsoever” on acquiring assets whose future is that uncertain.

PARTYPOKER AN H1 STAR
GVC’s sports brands (Bwin, Sportingbet) reported H1 2017 betting handle falling just 1% year-on-year, despite H1 2016 including the Euro 2016 football tournament. And sports revenue improved 6% to €172.7m, while the sports brands’ gaming revenue gained 16% to €182.4m.

Games brands (PartyPoker, PartyCasino, CasinoClub, Gioco Digitale and Foxy Bingo) reported gaming revenue up 9% to €110.5m, while sports revenue dipped nearly one-fifth to €1.9m.

The games brands had been Bwin.party’s “most challenged segment” prior to GVC acquiring the company, and GVC said it took pride with having returned this segment to growth “after many years of decline.”

PartyPoker was singled out for special praise, as its revenue improved 32% in H1 and Q3 has witnessed “further acceleration” in deposit value and revenue growth. GVC credited “product development, increased marketing, localized market focus and improved player experience” for assisting PartyPoker’s turnaround.

GVC’s B2B division – which provides technology to MGM Resorts in New Jersey, as well as Denmark’s Danske Spil and France’s PMU – reported revenue up one-fifth to €7.7m. In June, GVC inked a partnership with Rambler Media to launch a Russia-facing Bwin-branded online sports betting site, which is set to make its debut before the year is through.

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