GVC upgrades profit forecasts thanks to strong growth in online performance

Strong online results have led the parent company of Ladbrokes and Coral to upgrade predictions for its financial performance this year, despite the problems facing high street bookmakers.

In a trading update released on Wednesday morning, GVC Holdings said its guidance range for Ebitda (earnings before interest, taxation, depreciation and amortisation) had been upgraded to £670–£680 million (from £650m–£670m).

Online net gaming revenue (NGR) grew by 12 per cent in the third quarter, despite the comparative period including part of last year's football World Cup in Russia.

Performance in the company's UK betting shop estate remained ahead of initial guidance, the company said, with like-for-like NGR down 18 per cent, due to the reduction in FOBT stakes to £2 imposed in April. However, over-the-counter NGR in betting shops was up seven per cent as some customers switched from FOBTs, while NGR on the machines was down 36 per cent.

Performance in the company's UK betting shop estate remains ahead of GVC's initial guidance

GVC has said it plans to shut up to 900 shops over two years as a result of the £2 stake and that it had closed a further 41 shops during the third quarter of the year, bringing the total it had closed following the stake reduction to 198.

GVC chief executive Kenny Alexander said: "I am delighted that the group's financial performance has allowed us to upgrade our full-year Ebitda expectations again.

"Online momentum remains strong across all major territories, with NGR up 12 per cent in the quarter despite the prior period containing part of the World Cup. This performance continues to be driven by our industry-leading technology, products, brands, marketing capability, and people."

Alexander added that the company was "very well placed" in the United States, where it has a joint venture with MGM Resorts and launched the BetMGM app in New Jersey in September. He also said the integration of the Ladbrokes Coral businesses into the wider group was "progressing well".

The company recently launched the GVC Global Foundation to coordinate and support its corporate social responsibility (CSR) initiatives around the world.

Alexander added: "This should be taken as a clear sign of our determination to spearhead the gambling industry's approach to CSR initiatives, particularly with regard to responsible gambling."

Analysts at Goodbody described the announcement as "a strong update from GVC". They added: "Online momentum remains positive, particularly considering the comparative period included the World Cup."

GVC shares were up by over five per cent at 788.6p at close of play on Wednesday.

For the freshest betting advice, based on latest going and market conditions, don't miss the Live Tipster every afternoon. Just click Raceday Live at racingpost.com or the mobile app