GVC finishes 2017 with a flourish and looks to Ladbrokes Coral merger
GVC Holdings, the company set to take over Ladbrokes Coral, said earnings for 2017 would be at the top end of expectations following a run of favourable sports results in the final quarter of the year.
The gambling group, which last month agreed a deal worth up to £4 billion for Britain's biggest betting shop operator, announced record quarterly net gaming revenue (NGR) for the last three months of 2017 of €279.5 million (approx £248m).
As a result NGR for 2017 is expected to be around €1.009bn, an increase of 13 per cent compared to the same period in 2016. Ebitda (earnings before interest, tax, depreciation and amortisation) is expected to be at the top end of management's expectations.
GVC, the owner of Sportingbet and bwin among other brands, reported gross win margin in the final quarter for its sports brands was 13.1 per cent, significantly ahead of the expected long-term average of 10 per cent.
Analysts at stockbroker Davy said: "GVC’s post-close trading update points to a very favourable run of sports results in Q4."
GVC's takeover of Ladbrokes Coral will create one of the world's largest gambling companies. The final price of the deal depends on what limit the government sets for FOBT stakes following its ongoing consultation, ranging from £3.2bn if it is £2 to £4bn at £50.
GVC chief executive Kenny Alexander said of the latest figures: "I’m delighted to report another strong year for the group with underlying NGR growth of 18 per cent, reflecting the strength of our brands, technology and the hard work of our talented people.
"We have once again demonstrated our ability to integrate significant acquisitions, realise material synergies and at the same time deliver top line growth.
"The recommended transaction with Ladbrokes Coral Group presents an exciting opportunity for both sets of shareholders, creating a global gaming group with a portfolio of strong brands across all major regulated online markets, together with proprietary technology and proven management."
GVC's share price closed down 3.5p at 955p on Thursday.
Analyst Gavin Kelleher of Goodbody said: "Overall this is another very positive update from GVC, which again highlights a strong underlying performance from the group in both sports and gaming."
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