GVC chief executive Kenny Alexander says the gambling company could enter the FTSE 100 in four years time, based on organic growth alone. The odds on this happening may have shortened after double-digit growth in constant-currency revenue at the half-year mark, coupled with a 28 per cent rise in cash profit. On the operating front, the company successfully refinanced its debt facilities during the period and is on track to achieve the targeted €125m (£111m) in cost-saving synergies from the bwin.party acquisition by the end of the current year.
Sports brands’ wagers were flat at constant currencies, against strong numbers last year, which were helped by the UEFA Euro 2016 football tournament. Meanwhile, partypoker was the star performer of the games brands division, with net gaming revenue (NGR) up 32 per cent. Mr Alexander says casino brands were the “steady Eddies” of the division. Bingo’s revenues declined, but Foxy Bingo has rebranded with actress Heather Graham as its new face, and performance is already improving. Around 23 per cent of group revenue derived from Germany, which management notes is GVC’s fastest-growing market.
Where possible, GVC seems intent on avoiding exposure to markets that could fall foul of regulators in favour of licensed territories, or those where licensing structures are being implemented. Management has withdrawn a licence application in the Czech Republic due to an “opaque licensing process” and criticised Poland’s online casino monopoly as being “contrary to EU law”.
Analysts at broker Numis forecast adjusted pre-tax profit of €211.5 and EPS of 68.1¢, up from €105.9m and 26¢ in 2016.
| GVC (GVC) | ||||
| ORD PRICE: | 832p | MARKET VALUE: | £2.5bn | |
| TOUCH: | 832-833p | 12-MONTH HIGH: | 850p | LOW: 576p |
| DIVIDEND YIELD: | ** | PE RATIO: | na | |
| NET ASSET VALUE: | 445¢* | NET DEBT: | 11% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Jun | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 | 382 | -86.1 | -33.0 | nil |
| 2017 | 473 | -6.8 | -2.0 | 16.5 |
| % change | +24 | - | - | - |
| Ex-div: | 21 Sep | |||
| Payment: | 19 Oct | |||
| *Includes intangible assets of €1.56bn, or 517¢ per share**Excludes special dividend of 15.1¢ paid on 12 May 2017, and special dividend of 14.9¢ paid on 14 Feb 2017. £1 = €1.12 | ||||
