The market gave a neutral response to GVC’s (GVC) half-year results, with the shares flat on results day. Acknowledgement, perhaps, that the betting company’s trading held up well in the period, especially given that the sporting calendar was wiped out due to coronavirus.
Adjusted cash profits dipped 5 per cent to £349m, in line with guidance. But online the same figure climbed up by more than a half, led by a 19 per cent spike in net gaming revenue. GVC’s gaming division grew by almost a third, and sports posted growth of 5 per cent despite the prolonged absence of live sport events.
But the revitalisation of the sporting calendar, as well as the reopening of its retail operations, should support the company for the remainder of the year. Management is guiding to underlying adjusted cash profits in the range of £720m to £740m for 2020.
GVC also pushed ahead with a second round of investment in BetMGM, its joint venture with MGM Resorts in the US. The total joint investment now stands at $450m (£346m), and should strengthen the company's ambition to secure a leading role in the US market – which it anticipates will be worth $20.3bn by 2025.
Broker Peel Hunt forecasts adjusted pe-tax profit of of £375.7m and EPS of 55.5p in the 2020 full year, rising to £497.5m and 73.8p in 2021.
| GVC (GVC) | ||||
| ORD PRICE: | 784p | MARKET VALUE: | £4.6bn | |
| TOUCH: | 783-785p | 12-MONTH HIGH: | 324p | LOW: 939p |
| DIVIDEND YIELD: | 0.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 513p* | NET DEBT: | 71% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 1.78 | -12.3 | -0.6 | 17.6 |
| 2020 | 1.58 | 24.8 | -1.0 | nil |
| % change | -11 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £5.37bn or 920p a share | ||||
