2018 Full Year Results

Jay DossetterNews

5 March 2019

GVC Holdings PLC
(“GVC” or the “Group”) 

Final results for the year ended 31 December 2018

 Global scale and market diversification delivering very strong online growth in all key territories

Click here for a PDF of the full release

GVC Holdings PLC (LSE: GVC), the global sports-betting and gaming Group, is pleased to announce its results for the year ended 31 December 2018.

Group

Reported1

Proforma2

Year ended 31 December

2018

2017

2018

2017

Change

Constant currency3

£m

£m

£m

£m

%

%

Net gaming revenue (NGR)

2,979.5

815.9

3,571.4

3,288.1

9%

9%

Revenue

2,935.2

789.9

3,523.6

3,247.6

8%

9%

Gross profit

2,004.2

575.3

2,404.4

2,256.3

7%

Underlying EBITDA4

640.8

211.3

755.3

666.5

13%

Underlying operating profit5

520.8

169.2

610.1

514.1

19%

Underlying profit before tax5

434.6

151.0

Loss after tax

(56.4)

(34.9)

Diluted EPS (p)

(12.2)

(11.6)

Continuing adjusted diluted EPS6 (p)

76.3

43.6

Total Dividend per share (p)

32.0

29.8

Financial highlights (proforma basis2)

  • Proforma Group NGR up 9% at £3,571.4m
  • Proforma Group revenue up 8% at £3,523.6m
  • Proforma Group underlying EBITDA4 up 13% at £755.3m
  • Proforma Group underlying operating profit5 up 19% at £610.1m

Financial highlights (reported basis1)

  • Reported Group NGR up 265% at £2,979.5m
  • Reported Group underlying EBITDA4 up 203% at £640.8m
  • Reported Group loss after tax of £56.4m after charging £434.2m (£453.5m pre-tax) of separately disclosed items of which £322.5m relates to the non-cash amortisation of acquired intangibles
  • Adjusted diluted EPS6 of 3p up 75%
  • Second interim dividend of 16.0p per share taking the full year dividend to 32.0p, an increase of 7% y-o-y
  • Adjusted net debt at 31 December 2018 of £1,896.6m (2.5x underlying proforma EBITDA)

Operational highlights (proforma basis2)

  • Very strong growth in Online with market share gains in all key territories; NGR up 19% (+21% in constant currency (“cc”)3); Sports brands NGR +20% (+22% cc3) and Games brands NGR+16% (+16% cc3)
  • UK Retail like-for-like7 NGR -3%; OTC trends in-line with expectations, Machines returned to growth in H2
  • European Retail NGR +16% (+14% cc3) with growth in all territories
  • Integration of the Ladbrokes Coral business progressing well; on track to deliver £130m cost synergies and £30m capex synergies. Playtech agreement gives greater flexibility
  • US: Business well placed for growth; appointment of key roles

Current Trading2 (Period 1 January 2019 to 24 February 2019)

  • Strong current trading. Group NGR +11% with Online NGR +22%.

Kenneth Alexander (CEO) said:

“The Group’s full year results reflect a very strong performance with proforma net gaming revenue 9% ahead of last year and proforma underlying EBITDA 13% ahead. 2018 was a transformational year for the Group with the completion of the Ladbrokes Coral acquisition in March making the Group the largest online-led sports-betting and gaming operator in the world. Excellent operational execution, effective marketing and a good World Cup helped both the legacy GVC and the acquired Ladbrokes Coral businesses perform ahead of expectations and materially ahead of the market, delivering market share gains in all our major territories.

The GVC operating model leverages the Group’s leading proprietary technology and product development capability, applying central marketing expertise alongside local operational execution. This model is proving highly effective. Combined with the benefit of being a truly global scale operator, together with the opportunities provided by the integration of Ladbrokes Coral and our joint-venture in the US with MGM Resorts, the Board is confident the Group is well-placed to absorb the impact of the Triennial Review and associated tax increases in 2019, and deliver strong EBITDA growth in future years.”

Notes

  • 2018 and 2017 reported results are audited and reflect the acquisition of the Ladbrokes Coral Group plc on 28 March 2018
  • The Group’s proforma results are unaudited and presented as if the current Group, post the acquisition of Ladbrokes Coral Group plc, had existed since 1 Jan 2017. As such, it excludes the results of the Turkish business which was discontinued during 2017 and the 360 shops that the Ladbrokes Coral Group plc was required to divest on the merger of Ladbrokes PLC and the Coral Group. The results of Crystalbet and Neds are included from the dates of acquisition (11 April 2018 and 28 November 2018 respectively) and the results of Kalixa are excluded from the date of disposal (31 May 2017)
  • Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2018 exchange rates
  • Stated pre separately disclosed items and shared based payments
  • Stated pre separately disclosed items
  • Adjusted for the impact of separately disclosed items, foreign exchange movements on financial indebtedness and gains on derivative financial instruments (see note 25 in the year end financial statements)
  • UK Retail numbers are quoted on a LFL basis. During the year ended 31 December 2018 there was an average of 3,524 shops in the estate, compared to an average of 3,618 in the prior year

Presentation and live webcast
An analyst presentation will be held at 9:30am (GMT) at Buchanan Communication, 107 Cheapside, London EC2V 6DN. The presentation will be webcast live and will be available via the following link:

http://webcasting.buchanan.uk.com/broadcast/5c58566da0c50933d2711d23

Replays will be available on the GVC website.

Conference call
UK Toll: +44 3333000804 or UK Toll Free: 08003589473

PIN: 44657245 #

URL for international dial in numbers: http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf

Financial calendar
16 May 2019     Capital Markets Day
5 June 2019      AGM

Enquiries:

GVC Holdings PLC

Kenneth Alexander, Chief Executive Officer

Rob Wood, Chief Financial Officer

Paul Tymms, Director of Investor Relations & Corporate Communications

(investors@gvc-plc.com)

Media enquiries:

Buchanan Communications

David Rydell/Henry Harrison-Topham/Chris Lane

Tel: +44 (0) 20 7466 5066

Forward-looking statements
This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, results of our operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. These forward-looking statements include all matters that are not historical facts. By their nature, these statements involve risks and uncertainties since future events and circumstances can cause results and developments to differ materially from those anticipated. Any such forward-looking statements reflect knowledge and information available at the date of preparation of this document. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014), the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), the Company undertakes no obligation to update or revise any such forward-looking statements. Nothing in this document should be construed as a profit forecast. The Company and its directors accept no liability to third parties in respect of this document save as would arise under English law.

About GVC Holdings PLC
GVC Holdings PLC is one of the world’s largest sports-betting and gaming groups, operating both online and in the retail sector. The Group owns a comprehensive portfolio of established brands; Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds and Sportingbet; Games Brands include CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino. The Group owns proprietary technology across all of its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis. GVC acquired Ladbrokes Coral Group plc on 28 March 2018 and is now the UK’s largest high street bookmaker, with over 3,400 betting shops. The Group has also entered into a joint-venture with MGM Resorts to capitalise on the sports-betting and gaming opportunity in the US. The Group, incorporated in the Isle of Man, is a constituent of the FTSE 100 index and has licences in more than 20 countries, across five continents.

For more information see the Group’s website: www.gvc-plc.com

LEI: 213800GNI3K45LQR8L28

Click here for PDF of full release