2019 Full Year Results

Jay DossetterNews

5 March 2020

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

Final results for the year ended 31 December 2019

A strong financial and operational performance
Underlying EBITDA ahead of original expectations

Click here to download a PDF of the full results 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 2019.

Group

Reported1

Proforma2

Year ended 31 December

2019

Pre IFRS 16 2019

2018

Pre IFRS 16 2019

2018

Change3

CC4

£m

£m

£m

£m

£m

%

%

Net gaming revenue (NGR)

3,655.1

3,655.1

2,979.5

3,655.1

3,571.4

2%

3%

Revenue

3,600.5

3,600.5

2,935.2

3,600.5

3,523.6

2%

3%

Gross profit

2,378.2

2,378.2

2,004.2

2,378.2

2,404.4

(1%)

Underlying EBITDAR5

782.7

782.7

723.7

782.7

864.3

(9%)

Underlying EBITDA5

761.1

678.3

640.8

678.3

755.3

(10%)

Underlying operating profit6

520.0

490.1

520.8

490.1

610.1

(20%)

Underlying profit before tax6

535.8

522.9

434.6

Loss after tax

(140.7)

(159.2)

(56.4)

Diluted EPS (p)

(26.4)

(28.3)

(12.2)

Adjusted diluted EPS7 (p)

64.2

62.3

76.3

Total dividend per share (p)

35.2

32.0

Financial highlights (proforma basis2 pre IFRS 16)

  • Proforma Group NGR up 2% (+3% on a constant currency4 (cc) basis) at £3,655.1m, driven by the strong performance in Online, European Retail and UK Retail OTC
  • Proforma Group Revenue up 2% (+3% cc) at £3,600.5m, over 96% of which was from markets that were either regulated or in the process of regulating
  • Proforma Group underlying EBITDA5 down 10% at £678.3m
  • £50m ahead of consensus at the start of the year
  • Up 14% ahead after adjusting for the estimated impact of the Triennial Review and incremental taxes8
  • Online underlying EBITDA5 was 20% ahead after adjusting for the estimated impact of incremental taxes8
  • UK Retail underlying EBITDA5 was 5% ahead after adjusting for the estimated impact of the Triennial Review8
  • Proforma Group underlying operating profit was 20% lower than 2018 at £490.1m
  • Excluding net debt arising on IFRS 16 of £347.1m, adjusted net debt at 31 December 2019 was £1,822.7m 2.7x LTM underlying EBITDA5 pre IFRS 16 (2018: £1,896.6m)

Financial highlights (reported basis1)

  • Reported Group NGR up 23% at £3,655.1m
  • Reported Group underlying EBITDA5 up 19%
  • Reported Group loss after tax of £140.7m after charging £630.1m (£710.0m pre-tax) of separately disclosed items, of which £376.2m relates to the non-cash amortisation of acquired intangibles (primarily arising from the acquisitions of Ladbrokes Coral and bwin) and £245.0m to a non-cash impairment of the Group’s Australian Online business
  • Diluted EPS7 loss of 26.4p (2018: loss of 12.2p)
  • Second interim dividend of 17.6p per share, taking the full year dividend to 35.2p, an increase of 10% on 2018 in line with the Group’s current dividend policy of double digit dividend growth
  • Adjusted net debt, post IFRS 16, at 31 December 2019 of £2,169.8m (2.9x underlying EBITDA)

Operational highlights (proforma basis2 pre IFRS 16)

  • Safer gambling & ESG
  • Unilateral commitment to increase responsible gaming funding by ten fold in the UK and withdrawal of sponsorship on football shirts and perimeter boards
  • Leading the industry with the introduction of a pre-watershed whistle-to-whistle ban on advertising during the broadcast of live sport10 on UK TV
  • Launch of the GVC Global Foundation to coordinate and support GVC’s Environmental, Social and Governance (ESG) initiatives, objectives and donations around the world
  • Very strong growth in Online with market share gains in all key territories once again;
  • total NGR up 13% (+14% cc)
  • sports NGR 16% ahead (+17% cc)
  • gaming NGR 13% ahead (+13% cc)
  • UK Retail like-for-like (LFL)9 NGR -12%; LFL sports NGR grew by 7%, driven by;
  • excellent implementation of our Triennial mitigation plans by UK Retail colleagues and continued investment in shops
  • LFL machines NGR down 26% as a result of the introduction of the £2 limit on B2 machines stakes
  • European Retail proforma NGR +4% (+5% cc) with growth in every year post the Ladbrokes and Coral merger
  • US: Roar Digital has established multi-year partnerships with Buffalo Wild Wings and Yahoo Sports, providing the opportunity to reach the widest possible audience of engaged sports fans in the US and, following launches through the year, GVC technology is now powering both Online and Retail offerings in the US

Kenneth Alexander (CEO) commented:

“Our first full year since the Ladbrokes Coral acquisition has been a good one, and the performance has continued to be underpinned by our unique and highly effective operating model. We have delivered very strong growth in our Online business, including market share gains in all major territories, and good momentum in our European Retail business. This revenue growth has more than offset the impact on the UK Retail business of the £2 restriction on B2 machines stakes. We are delighted with the progress that is being made on the Ladbrokes Coral integration, and in the US the launch of BetMGM on the GVC platform in New Jersey was an important milestone for our business there and enables us to remain on track to deliver on our ambitions in this exciting market.

During the year, we have also continued to clearly demonstrate our leadership in, and commitment to, Responsible Gambling with a number of decisive actions, not least being the first in our industry to commit to a ten-fold increase in contributions to Responsible Gambling causes and our call for a total ban on sports-betting television advertising in the UK. Having an effective regulatory environment is critically important in encouraging customers to play with responsible regulated operators. With that in mind, it is our firm view that over-regulation in the UK would result in customers moving to the black market where there is zero responsibility, zero protection and zero tax being paid to the Treasury. As a consequence, it would also lead to a reverse in the considerable decline in problem gambling that the industry has delivered over recent years.

Looking ahead, we are confident that GVC’s broad international footprint, proven track record of acquisition and strong organic growth will continue to present significant opportunities for further expansion.”

Current Trading (Period 1 January 2020 to 23 February 2020)
Trading in the year to date was strong with Group NGR +5% cc and Online NGR +16% cc, both of which have benefitted from strong sports margins in the first two months. This represents a good start to the year and, at this early stage, the Board is confident of delivering EBITDA and operating profit in line with expectations.

Conference call
A presentation to analysts will be held at 9:30am (GMT) today at the offices of Deutsche Bank.

The presentation will be broadacst on the Group’s website : https://webcasting.brrmedia.co.uk/broadcast/5e417bac2aec863039efac73

Participants may join the call by dialing the following number approximately 10 minutes before the start of the call:

UK Toll: +44 (0)330 336 9411
Confirmation code:  6600932

Enquiries:

Investor Relations

GVC Holdings PLC

David Lloyd-Seed, Director of Investor Relations & External Communications

Tel: +44 (0) 203 938 0000

Jennifer Spencer, Investor Relations Manager

(investors@gvc-plc.com)

Media

GVC Holdings PLC

Jay Dosseter, Head of CSR & Corporate Communications

Tel: +44 (0) 203 938 0000

Powerscourt

Rob Greening / Elly Williamson

Tel: +44 (0) 20 7250 1446

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; Gaming 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. 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 250 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