GVC Holdings PLC (AIM:GVC), the multinational sports betting and gaming group, today announces its Interim Results for the six-months ended 30 June 2014 together with its quarterly dividend and a special dividend.
View the slides of the Interim Results Presentation
- Quarterly dividend of 12.5 €cents (2013: 10.5 €cents)
- Additional special dividend of 2.5 €cents (2013: nil)
- Total quarterly dividend is 15 €cents, up 43% on same quarter last year (2013: 10.5 €cents)
- Cumulative dividends payable in calendar year 2014, 55 €cents. Total up 96% over prior year (2013: 28 €cents)
- Wagers up 38% to €694 million (H1-2013: €502 million)
- Sports margin 9.9% (H1-2013: 10.3%)
- Net Gaming Revenue (“NGR”) up 44% to €105 million (H1-2013: €73 million)
- Contribution up 25% to €57 million (H1-2013: €46 million)
- Clean EBITDA up 26% to €22.4 million (H1-2013: €17.8 million)
- Strong start to Q3-2014: trading per day, at €628k is 20% higher than Q3-2013 (€523k)
- A leading operator of in-play markets with over 4,000 concurrent markets
- A market leading sports-trading team generating 10% margin
- Current number of active customers up 22% on prior year
- New depositing customers, 56k in Q3-2014,up 30% on Q3-2013
- Deposits up 22% on Q3-2013
- Enhancement of mobile product and sportsbook planned for 2015
- In-play generating 70% of sports gross margin
- Mobile generating 22% of sportsbook revenues
Commenting on the results, Kenneth Alexander, Chief Executive of GVC Holdings plc, said: “GVC operates in numerous markets in both casino and sports betting and as a group is well diversified and highly cash generative. GVC is now in a very strong position with exciting growth prospects as we continue to develop our market leading in-house sportsbook and mobile platform. The Group remains highly confident for the outcome of this current financial year and this confidence is reflected in the enhanced dividend that we have announced today.”
For further information:
|GVC Holdings PLC|
|Kenneth Alexander, Chief Executive||Tel: +44 (0) 1624 652 559|
|Richard Cooper, Group Finance Director||www.gvc-plc.com|
|Daniel Stewart & Company Plc||Tel: +44 (0) 20 7776 6550|
|Paul Shackleton / Mark Treharne||www.danielstewart.co.uk|
|Henry Harrison-Topham / Jamie Hooper||Tel: +44 (0) 20 7398 7702|
About GVC Holdings PLC
GVC Holdings PLC is a multinational sports betting and gaming group. Its core brands are CasinoClub, Betboo and Sportingbet. The Group has over 600 employees and is headquartered in the Isle of Man and is licensed in Malta, Germany, Denmark, UK, South Africa, Italy, Alderney and the Dutch Caribbean.
Further information on the Group is available at www.gvc-plc.com
The Group has had an excellent 2014 so far, with a very strong performance during the World Cup, which has built on the success of the complete restructuring of the Sportingbet business that GVC acquired in 2013.
The Board is delighted to announce today a second special dividend in this year, this time allowing our shareholders to participate in GVC’s successful World Cup performance during which, customer acquisition accelerated, sports margins were strong and systems proved very robust.
During 2014 the Group has declared a dividend of 11.5 €cents per share (“€cps”) in January 2014, 16.0 (12.5+3.5) €cps in April 2014, 12.5 €cps in July 2014 and now 15 €cps (12.5+2.5) in September 2014, bringing the total dividend declarations to 55 €cps for the year to date, and being 96% higher than in 2013 despite an additional 30 million shares in issue.
GVC’s commitment to highly cash generative markets does not however come at the expense of investing in the future. GVC will continue to invest and develop its in-house sportsbook and mobile technology to maximise the Group’s growth prospects and generate the cash crucial to its aggressive dividend policy.
The Group’s Latam business continues to grow impressively and remains the market leader in Latam for sports betting. Furthermore, the Group demonstrated its commitment to widening its geographical offering by the 15% investment in the Scandinavian start-up venture, Betit, who in the short space of time since its launch has captured meaningful market share in the Scandinavian online casino market across its brands.
GVC’s relentless focus on the customer journey is applied across all markets and the Group’s customer facing teams are incentivised to deliver a positive experience to our customers.
* to midnight Thursday 18 September 2014
¶ based on pro-forma revenues
Both sports wagers and NGR per day have increased quarter on quarter and NGR per day is now averaging €628k.
The relative mix between sports NGR and other revenues has remained relatively static at just under 50% (H1-2013: 51%; H2-2013: 49%), but in-play now amounts to 70% of wagering, and mobile was around 22% up from a low base of 8% in H1-2013 before GVC started investing in it.
Operationally, current trading across all measures is at least 20% higher than in 2013:
- Deposit values were up 22% in Q3-2013;
- Active and new depositing customers were up 30% on the same period last year.
Under GVC’s tenure, the Sportsbook platform has been developed to give significantly greater latency, response time and volume capability. In the last quarter the uptime has been 99.999%, handling over 4,000 concurrent events, more than 100% higher than the same period in 2013. The number of sports bets placed per day during Q2-2014 averaged 212,000 up 27% on Q2-2013 which averaged 167,000.
The quarterly and special dividend totalling 15 €cent per share will be payable on Monday 3 November 2014 to shareholders on the register (“the record date”) on Friday 10 October 2014. The shares will go “ex-dividend” on Thursday 9 October 2014.
The Board remains highly confident for 2014 and this confidence is expressed in the enhanced dividend declared today. We look forward to providing further trading updates in December 2014 and January 2015.
22 September 2014
I start my report by summarising the business model of the Group and expressing this into “figures per day.” This accords with our preferred KPI disclosures. Section 2 of my report summarises the primary Financial Statements along with a short explanation behind material movements in the figures.
SECTION 1: Summary of business model based upon H1-2014
(Subject to roundings)
|Wagers per day||694,320||3,836|
|Sports margin %||9.9%||–|
|Add-on revenue less all bonuses||21,187||116|
|Net cashflow available for other uses||18,315|
|Dividends paid in period||16,755|
|% of available cashflow distributed||91%|
*the principal component of this were funds paid in pursuance of the Betboo earn-out
SECTION 2: Summary of financial disclosures
|(In € millions)||H1-2014||H1-2013|
|INCOME STATEMENT EXTRACTS|
|Other operating costs||(34.3)||(27.8)|
|Non-cash operating costs||(1.9)||(2.0)|
|Profit before tax||19.6||1.9|
|Contribution margin (contribution/pro-forma revenue)||54.0%||53.4%|
|Clean EBITDA margin (clean EBITDA/proforma revenue)||21.3%||20.9%|
|BALANCE SHEET EXTRACTS||30.6.14||30.6.13|
|Net current assets before loans and leases||1.4||7.6|
|Loan from William Hill||(8.1)||(7.3)|
|Betboo deferred consideration||(4.8)||(10.6)|
|Total net assets||143.7||142.2|
|Exceptional items, contribution and costs relating to the acquisition of Sportingbet||–||(13.8)|
|Contribution from William Hill to the acquisition of Sportingbet||–||42.6|
|Loan from William Hill||–||8.0|
|Working capital movements including liabilities pursuant to the acquisition||(0.8)||(28.3)|
|Betboo earn-out payments||(3.1)||(2.5)|
|Purchase of non-current assets||(0.2)||–|
|Trade investment in Betit (including costs)||(3.6)||–|
|Finance lease payments||(0.5)||–|
|Net corporate tax payments||(0.2)||(0.1)|
|Share option subscriptions||–||0.2|
|Cash at start of period||18.8||6.6|
|Cash at end of period||16.0||28.3|
Group revenues at €105.1 million were 43.6% ahead of the same period last year.
Contribution at €56.7 million rose by 24.5%. The contribution margin was 54%. This reflects the investments made ahead of and during the World Cup, particularly in Latin America where the Group raised marketing expenditure by €4.5 million in this one region alone.
Clean EBITDA rose €4.6 million, 25.6% or 7.5 €cents per share to €22.4 million.
Non-cash items of operating expenditure (share option charges, depreciation and amortisation) fell to €1.9 million from €2.0 million.
Exceptional items H1-2014: €zero. H1-2013 reflected restructuring costs following the Sportingbet acquisition.
Financial income. The credit in H1-2013 is attributable to a one-off imputed interest credit on the interest-free loan from William Hill, drawn-down in H1-2013. It is a non-cash item.
Net current assets before betting tax accruals and loan instruments, have fallen due a higher value of dividend paid during the period (€16.8 million in H1-2014 compared to €2.2 million in H1-2013).
Betting tax accruals have naturally increased substantially as GVC is paying betting taxes in six markets, where local taxes are levied.
William Hill loan. This has remained static in underlying terms, but a strengthening in GBP since 30 June 2014 (1.25, up from 1.17 at 30 June 2013) has increased the liability as measured in Euros.
Cashflow. The key points on the Group’s cashflow are:
- 15% stake in Betit, €3.5 million plus associated costs
- A modest amount repayable to finance lease houses (€0.5 million; H1-2012 €nil) in furtherance to acquisitions of computer hardware for the Group’s growing data centers.
- Continuation of working capital absorption as the Group grows.
The Group issued 216,513 shares to employees and consultants between 30 June 2013 and 30 June 2014. On 1 July 2014, a further 343,053 shares were issued to third parties following their underwriting commitments pursuant to the Sportingbet acquisition in 2013.
As announced on 2 June 2014, the Company granted a total of 3,100,000 nil cost share options; 2,100,000 to directors and 1,000,000 to senior executives. The awards will vest in full and become exercisable on the share price being equal to or exceeding £6.00 per share for a continuous period of 90 calendar days at any time from 30 May 2014.
During H1-2014, 26,667 share options at an exercise price of €1.26 were exercised and the resulting cash receipt was translated into Euros as €41,187 which when rounded is reported in the above analysis as €0.0k.
Group Finance Director
22 September 2014
|Other operating costs||3||(34,367)||(27,750)||(64,332)|
|Share based payments||(124)||(224)||(730)|
|Depreciation and amortisation||(1,772)||(1,771)||(3,740)|
|Profit before tax||19,612||1,859||13,014|
|Profit after tax||19,165||1,543||12,303|
|Earnings per share||€||€||€|
*restated – see note 13 for details
|Profit for the period||19,165||1,543||12,303|
|Items that may be reclassified subsequently to profit or loss:|
|Exchange differences on translation of foreign operations||–||123||359|
|Profit and total comprehensive income for the period||19,165||1,666||12,662|
|Property, plant and equipment||864||649||918|
|Total non-current assets||156,873||152,523||154,768|
|Receivables and prepayments||7||24,237||23,527||23,579|
|Income taxes reclaimable||3,881||1,582||1,877|
|Other tax reclaimable||201||–||306|
|Cash and cash equivalents||8||15,995||28,298||18,808|
|Total current assets||44,314||53,407||44,570|
|Trade and other payables||9||(26,225)||(28,968)||(24,089)|
|Balances with customers||(13,060)||(13,807)||(13,298)|
|Income taxes payable||(4,946)||(2,351)||(2,722)|
|Other taxation liabilities||(2,344)||(671)||(4,182)|
|Total current liabilities||(46,575)||(45,797)||(44,291)|
|Current assets less current liabilities||(2,261)||7,610||279|
|Long term liabilities|
|Interest bearing loans and borrowings||(747)||–||(1,221)|
|Non-interest bearing loan||10||(5,352)||(7,306)||(5,148)|
|Deferred consideration on Betboo||(4,842)||(10,601)||(7,582)|
|Total net assets||143,671||142,226||141,096|
|Capital and reserves|
|Issued share capital||11||609||607||609|
|Total equity attributable to equity|
holders of the parent
*restated – see note 13 for details
Attributable to equity holders of the parent company:
|Balance at 1 January 2013||316||40,407||611||–||17,137||58,471|
|Share option charges||–||–||–||–||230||230|
|Lapsed share options||–||–||–||–||(6)||(6)|
|Share options exercised||1||–||158||–||–||159|
|Issue of share capital for the acquisition of Sportingbet PLC||290||–||83,628||–||–||83,918|
|Transactions with owners||291||–||83,786||–||(1,988)||82,089|
|Profit and total comprehensive income||–||–||–||123||1,543||1,666|
|Balance as at 30 June 2013||607||40,407||84,397||123||16,692||142,226|
|Balance at 1 July 2013||607||40,407||84,397||123||16,692||142,226|
|Share option charges||–||–||–||–||506||506|
|Share options exercised||2||–||133||–||–||135|
|Transactions with owners||2||–||133||–||(12,261)||(12,126)|
|Profit and total comprehensive income||–||–||–||236||10,760||10,996|
|Balance as at 31 December 2013||609||40,407||84,530||359||15,191||141,096|
|Balance at 1 January 2014||609||40,407||84,530||359||15,191||141,096|
|Share option charges||–||–||–||–||124||124|
|Share options exercised||–||–||41||–||–||41|
|Transactions with owners||–||–||41||–||(16,631)||(16,590)|
|Profit and total comprehensive income||–||–||–||–||19,165||19,165|
|Balance as at 30 June 2014||609||40,407||84,571||359||17,725||143,671|
Under The Isle of Man Companies Act 2006, distributions are not governed by reserves but by the Directors undertaking an assessment of the Company’s solvency at the time of distribution.
|Cash flows from operating activities|
|Cash receipts from customers||106,316||85,022||173,885|
|Cash paid to suppliers and employees||(84,685)||(100,106)||(181,592)|
|Corporate taxes recovered||–||–||1,143|
|Corporate taxes paid||(220)||(89)||(1,580)|
|Net cash from operating activities||21,411||(15,173)||(8,144)|
|Cash flows from investing activities|
|Acquisition earn-out payments||(3,140)||(2,541)||(6,378)|
|Investment in Betit (note 12)||(3,649)||–||–|
|Acquisition of Sportingbet (note 12.2)||–||64,792||64,755|
|Non-interest bearing loan||–||8,020||8,020|
|Acquisition of property, plant and equipment||(229)||–||(37)|
|Acquisition of intangible assets||–||–||(4)|
|Net cash from investing activities||(7,010)||70,276||66,389|
|Cash flows from financing activities|
|Proceeds from issue of share capital||41||159||294|
|Repayment of borrowings (note 12.2)||–||(31,384)||(31,384)|
|Finance lease payments||(500)||–||–|
|Net cash from financing activities||(17,214)||(33,437)||(46,069)|
|Net (decrease)/increase in cash and cash equivalents||(2,813)||21,666||12,176|
|Cash and cash equivalents at beginning of the period||18,808||6,632||6,632|
|Cash and cash equivalents at end of the period||15,995||28,298||18,808|
The notes are available in the PDF download.