GVC Holdings PLC (AIM:GVC), a leading online gaming company, today announces that through its wholly owned Maltese subsidiary, GVC Corporation Limited, the Company has entered into an agreement with an independent third party company, GVC New Limited (“New”), to dispose of its Betaland sports book and gaming business (the “Business”) for a nominal sum (“Proposed Disposal”). GVC has been evaluating the future of its Betaland brand and has concluded that the returns on the Business no longer justify the risks involved with this operation. Betaland was historically the lowest margin business of the Group and heavily dependent on agency relationships.
GVC commenced its Betaland operation in Q3-2007.
GVC New Limited is not owned by GVC, nor any of its officers, shareholders or directors, but an entirely independent company incorporated in Malta. Within 24 months of completion the transferee has agreed to change its name to a name which cannot be reasonably interpreted as being associated with the GVC Group.
The Proposed Disposal is conditional upon the Lotteries and Gaming Authority (of Malta) providing consent to the business transfer. The disposal is expected to complete within the next month.
The Proposed Disposal is on a debt and cash free basis and for nil consideration. The transferee has agreed to take-on the majority of the staff of the business thus saving GVC significant redundancy costs. Notice to terminate the lease housing these Maltese based staff has been terminated effective 30 June 2012 at minimal cost.
The principal liabilities of the Business are customer liabilities. The principal assets of the Business are debtor balances along with the brand name and the URLs.
Historical financial information
In the year ended 31 December 2010, the date of the last audited accounts, the results and net assets of Betaland and the Group were:
|Net Gaming Revenue||€22.2 million||€54.9 million|
|Clean Ebitda||€1.9 million||€12.2 million|
|Profit before taxation||€1.6 million||€4.1 million|
|Gross assets||€4.4 million||€76.1 million|
|Net assets||€6k||€62.7 million|
In the six month period to 30 June 2011, the unaudited results were:
|Net Gaming Revenue||€10.5 million||€30.3 million|
|Clean Ebitda||€1.0 million||€5.2 million|
|Profit before taxation||€0.9 million||€2.5 million|
|Gross assets||€5.0 million||€83.4 million|
The disposal is not expected to change the historical pattern for paying dividends to shareholders.
Kenneth Alexander, Chief Executive Officer of GVC Holdings, said: “The declining profitability of Betaland led the Board of GVC to conclude it should exit this market. By transferring Betaland to an independent third party, GVC will have sheltered itself and its shareholders from the costs associated with the closure of this business as well as the potential to settle liabilities to customers directly.
“GVC’s remaining B2C brands CasinoClub and Betboo, along with its B2B activities, remain robust”
More information on the proposed disposal, along with a trading update, will be provided when the Group publishes its preliminary results for the year ended 31 December 2011 on Wednesday 25 April 2012.
For further information:
|GVC Holdings PLC|
|Kenneth Alexander, Chief Executive Officer||Tel: +44 (0) 20 7398 7715|
|Richard Cooper, Group Finance Director||www.gamingvc.com|
|Daniel Stewart & Company Plc||Tel: +44 (0) 20 7776 6550|
|David Hart / Paul Shackleton / Jamie Barklem||www.danielstewart.co.uk|
|Henry Harrison-Topham / Oliver Hibberd||Tel: +44 (0) 20 7398 7714|
About GVC Holdings PLC
GVC Holdings PLC is a leading online gaming company. The Group is headquartered in the Isle of Man and is licensed in Malta, and the Netherlands Antilles.
Further information on the Group is available at www.gamingvc.com.