The first half of 2020 hasn’t been great for GVC Holdings, but they’re happy with the result, all things considered. The operator saw a dip in net gaming revenue (NGR), revenue, gross profit and EBITDA (Earnings before interest, taxes, depreciation, and amortization), but pointed to new investments as the way of the future
GVC reported NGR fell from £1.8 billion to £1.6 billion when compared with the same period in 2019, and revenue also fell from £1.78 billion to 1.58 billion, both an 11% drop. Gross profit fell even more as a percentage, from £1.18 billion to £1.03 billion. EBITDA fell from £366.8 million to £348.6 million, a 5% drop.
The overall drop in profits came due to the total shutdown of retail shops. UK retail NGR fell 50% year over year, and European retail fell 48%.
Saving the company was online NGR, which raised 19%, showing double digit growth across all markets. Surprisingly, they even saw a 5% increase in sports NGR, despite the lack of sports throughout the period.
While touting their “industry-leading” response to the Covid-19 crisis, the biggest thing to look forward to from their interim report is their investment in BetMGM. Now having bet $450 million on it with their partner MGM Resorts, the company’s hoping deals with NFL teams, the PGA Tour and NASCAR pay off in the long run.
Shay Segev (CEO) commented:
“Given the unprecedented trading environment, GVC has delivered an encouraging performance in the first half, underlining the strength of our diversified business model and the expertise, adaptability and dedication of our people.
These results show that we have a strong foundation. As a technologist, I have huge admiration for what Kenny and the rest of my colleagues have achieved but I am also determined to pursue a programme of continuous improvement as we focus on our four technology-enabled priorities. These are leading the US market, organic growth, expanding into new markets, and being the most responsible operator in our industry. Our industry-leading technology will enable us to grow responsibly and sustainably, using our data-driven customer insights to ensure all of our customers have an enjoyable and safe experience while gaming with us. That is how we will deliver greater and more sustainable value for all our stakeholders.“
The outlook for the rest of the year is positive, with sports mostly returned and Covid-19 restrictions starting to ease up. GVC predicts an EBITDA of £720m-£740m for the full year of 2020.
