UK-listed gambling firm GVC Holdings PLC had a good run in the first 20 weeks of 2018, until extreme weather rained on its parade.
GVC reported that its total group net gaming revenue (NGR) in January to May 20, 2018 rose by as much as 7 percent, but the company said that the percentage could have been higher if not for adverse weather at the start of the year.
The gambling operator pointed out that its betting shops suffered a 5 percent drop in NGR in the first five months of the year due to 12 percent (one out of 10) of scheduled horse racing fixtures were cancelled due to the weather. Taking the major blow for the company were the Ladbrokes betting shops, according to GVC.
Punters weren’t also confident about placing multiple bets following the strong run of GVC wins in the latter part of 2017, the company said.
Nevertheless, GVC’s weak retail was offset by its online channels, which posted 17 percent NGR growth. Gaming NGR from sports customers increased by 16 percent as total bets climbed by 4 percent, according to GVC. The company’s game brands and B2B also performed well, with NGR rising by 16 percent and 46 percent, respectively. GVC’s European retail NGR grew 32 percent.
“The online operations continue to grow strongly and this is before we have started to implement best in practice across the enlarged group,” GVC CEO Kenneth Alexander said in a statement. “Regulatory challenges across the industry cannot be ignored but through our scale, diversification, proprietary technology and people, GVC is very well placed to continue to succeed.”
Meanwhile, GVC revised the expected cost savings from its Ladbrokes Coral Group acquisition to £130 million (US$173.25 million) per annum by 2021 from the previous estimates of £100 million ($133.27 million). Shares of GVC rose 4.6 percent to an all-time high of 1,028 pence on the London Stock Exchange following the announcement.
GVC also addressed the elephant in the room, which is the effect of the UK government’s decision to slash the fixed-odds betting terminal maximum stakes from £100 ($135.08) to £2 ($2.69). Alexander confirmed the impact of the policy but quickly assured investors that the company “expect to retain a profitable and highly cash generative UK retail estate.”
