H1 Love: Despite Local Uncertainties, GVC has Revised Full Year Gains Upwards

Local challenges in many markets seem to be a reflection of the reach of GVC more than a lack of resilience after H1.

GVC Holdings has revised its full year profit projections upwards.

Full Totals

Net gaming revenue (NGR) H1 revenues for the six months to 30 June came in at £1.81bn (€1.96bn$2.19bn), good for a 5% year-on-year rise when including Ladbrokes Coral’s pre-acquisition figures, and 61% taking into account results subsequent to the closing date of the acquisition on 28 March, 2018.

Online Growth Drivers

Drivers of the growth included the strong returns from GVC’s online business, which contributed a revenue rise of £1.02bn in the first half that was led by Gaming NGR's 17% jump to £574.6m and sports revenue's rise to £462.3m.

Key Acquisitions

These strong gains plus GVC's acquisitions of Georgia’s Crystalbet in April 2018 and Australia’s Neds in November 2018 offset a 32% year-on-year decline in B2B revenue.

UK Developments

Key markets in GVC's online division included the 13% climb of the UK's NGR, which was supplemented by efforts to revitalise the major Ladbrokes brand through real-time CRM and improved gaming cross-sell techniques.

Australia Market

Revenue after Value Added Tax and the Australian Goods and Services Tax of £28.5 totaled £1.78bn, for a commensurate 5% year-on-year improvement.

GVC's Australia market turned in a 28% constant currency boost, with GVC's discipline marketing and bouncing strategy offsetting new point of consumption taxes.

Italy Market

Key GVC market Italy grew revenue 15% on a constant currency basis, establishing needed momentum as the market enforces new advertising restrictions.

Germany Market

In Germany, GVC has more challenges online, where a reported 23% NGR growth in H1 is facing any number of impending operating restrictions under the incoming State Treaty on Gambling.

Brazil Market

Another jurisdiction where new regulations may bring GVC to the wrong side of regulation includes Brazil, where GVC up to this point has claimed to be Brazil's leading gaming brand in a jurisdiction reportedly developing a model for sportsbook-only regulations.

Outlook

With GVC's European retail business continuing to grow strongly, GVC should continue to absorb turbulence successfully as the overall brand carries further growth through year's end.