Gaming house GVC (GVC) has shown, once again, that it isn't distracted by acquisitions. Even though it was embroiled in an ultimately successful battle with 888 (888) to snap up mutual rival Bwin Party in 2015, it still secured a 15 per cent rise in sports wagers to nearly €1.7bn (£1.3bn) last year. Margins remained fairly consistent across the board, and the company boasted a rise in adjusted cash profit for a fifth consecutive year.
Reported profit was skewed by €23m-worth of deal costs, but the price tag seems to have been worth it. Already in 2016, like-for-like average net gaming revenue (NGR) per day is up 11 per cent for Bwin, contributing strongly to the 13 per cent group rise. Chief executive Kenny Alexander said the combined company would move onto Bwin's technology platform, part of GVC's plans to recoup €125m in cost synergies. Conversely, he added the group's marketing prowess had helped Bwin brand PartyPoker to register its first growth for five years - important, given Bwin had pre-tax losses of €40.2m in 2015.
Mr Alexander added the combined group now boasted the second and third largest poker and bingo brands which should improve its competitive advantage in these areas. Not only that, but Bwin's chief Norbert Teufelberger has joined the board along with two other additions which the company said adds "significant expertise" to the board. The staffing work does not stop there. The company has also made senior appointments across operations, product, sales, marketing and investor relations.
Besides integrating Bwin, the company said it would be focusing marketing expenditure on areas it could maximise returns and would also review non-core assets and identify potential disposals.
House broker Cenkos expects pre-tax profit of €87.8m in 2016, leading to EPS of 28.3¢, compared with €46.7m and 71.3¢ in 2015.
| GVC (GVC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 545p | MARKET VALUE: | £1.59bn | |
| TOUCH: | 544-546p | 12-MONTH HIGH: | 550p | LOW: 371p |
| DIVIDEND YIELD: | 13.3% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 44¢* | NET DEBT: | 151% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢)** |
|---|---|---|---|---|
| 2011 | 44 | -0.3 | -0.5 | 21.0 |
| 2012 | 60 | 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 | 40.2 | 56.0 |
| % change | +10 | -38 | -39 | +2 |
*Includes intangible assets of €155m or 121¢ a share £1=€1.29 **Dividends for 2016 are suspended. Full-year dividend of 56¢ paid quarterly during 2015 | ||||
