You wouldn't bet against GVC Holdings (GVC), based on its underlying full-year figures. A year-and-a-half on from the bidding war that saw Bwin.party added to its sports betting and gaming portfolio, the group is on target to deliver €125m (£108m) of synergies by the year-end and has bolstered pro-forma cash profits by 26 per cent to €206m. Little wonder that industry rival 888 (888) was also in the hunt for Bwin, before the owner of Foxy Bingo prevailed.
Conditional to the deal's financing arrangements, GVC undertook a dividend holiday until 1 February 2017, but that didn't stop it announcing its second special dividend in the past six months, bringing the total payout to 30¢ for 2016 - an effective yield of 3.6 per cent. The group aims to return no less than 50 per cent of future free cash flow.
Ongoing deal commitments have eased considerably due to a refinancing that effectively replaces a short-term coupon of 12.5 per cent with a seven-year arrangement at 3.25 per cent.
Analysts at Numis expect adjusted pre-tax profits of €181m in 2017, giving EPS of 54.5¢.
| GVC HOLDINGS (GVC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 721p | MARKET VALUE: | £2.12bn | |
| TOUCH: | 721-722p | 12-MONTH HIGH: | 766p | LOW: 477p |
| DIVIDEND YIELD: | ** | PE RATIO: | NA | |
| NET ASSET VALUE: | 475¢* | NET DEBT: | 9% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 60.0 | 10.8 | 29.3 | 26.0 |
| 2013 | 170 | 13.0 | 22.5 | 48.5 |
| 2014 | 225 | 41.3 | 66.4 | 55.0 |
| 2015 | 248 | 25.5 | 40.0 | 56.0 |
| 2016 | 843 | -139 | -51.0 | ** |
| % change | +240 | - | - | - |
Ex-div: 30 Mar Payment: 12 May £1=€1.154 *Includes intangible assets of €1.61bn or 547¢ a share. **Second special dividend of 15.1¢ declared, in addition to 14.9¢ payment declared in Nov 2016, paid to shareholders on 14 Feb 2017 | ||||
