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GVC ramps up dividend

Gambling operator GVC Holdings has ramped up shareholder returns after a strong first-half peformance.
September 23, 2014

A fifth consecutive quarter of growth for GVC Holdings (GVC) came down to an “excellent” World Cup, says chief executive Kenny Alexander. During the 2014 tournament the group witnessed a surge in turnover as a slew of new customers placed a high number of bets. 147,000 new players drove a 44 per cent improvement in net gaming revenues to €105m (£82m) for the half. The value of total wagers also rose 38 per cent to €694m.

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Renowned for its generous dividends and quarterly shareholder returns, GVC upped the second-quarter dividend by 19 per cent to 12.5ȼ a share. In addition, the company declared a special dividend of 2.5ȼ a share. So far, cumulative dividends payable in 2014 amount to 55ȼ a share - 96 per cent higher than total dividends paid in 2013.

Mr Alexander says the third quarter is going just as well, and that regulatory change – specifically the introduction of the Point of Consumption tax in December - won’t have a dramatic impact on the group’s finances. As it stands, GVC expects to pay approximately €1.5m in corporate taxes this year.

Analysts at Panmure Gordon expect pre-tax profits of €44.1m in 2014, giving EPS of 70ȼ, up from €37.1m and 58.8ȼ in 2013.

GVC HOLDINGS (GVC)
ORD PRICE:477pMARKET VALUE:£ 292m
TOUCH:473-480p12-MONTH HIGH:483pLOW: 306p
DIVIDEND YIELD:7.9%PE RATIO:12
NET ASSET VALUE:234ȼ*NET CASH:£15.2m

Half-year to 30 JuneTurnover (€m)Pre-tax profit (€m)Earnings per share (ȼ)Dividend** per share (ȼ)
201373.21.93.221
2014105.119.631.525
% change+43+932-2+19

Ex-div: 09 Oct

Payment: 03 Nov

*Including intangible assets of €152m or 249ȼ a share £1 = €1.27

**Excluding special dividends worth 6ȼ a share