This time last year GVC (GVC) shareholders had “overwhelmingly” approved the acquisition of Ladbrokes Coral. This year, shareholders are better able to gauge the impact of that deal. Chief executive Kenny Alexander said the integration of Ladbrokes “could not have gone better” so far, and is on track to deliver £130m of cost synergies and £30m of capital expenditure synergies.
Net gaming revenue more than tripled as a result of the deal to £2.98bn, and still increased 9 per cent on a pro-forma basis – it's not all about acquisitive growth. An amortisation charge of £323m relating to the Ladbrokes deal and the acquisition of Bwin in 2015 effectively wiped out reported profits, although underlying cash profits tripled to £641m.
GVC has also been building its presence in the US after the ban on sports betting was lifted in May. In July, the group announced a joint venture with MGM to create a “world-class sports betting and online gaming platform” in the US that will be evenly split between a retail and digital presence. So far it has generated £100m in revenue, and while it’s expected to make a $5m (£3.8m) loss in the current financial year, Mr Alexander expects it to be the market leader in the US in five years’ time
Analysts at Peel Hunt expect adjusted pre-tax profits of £382m during 2019, giving EPS of 53.8p, compared with £512m and 73.9p in 2018.
| GVC (GVC) | ||||
| ORD PRICE: | 675p | MARKET VALUE: | £3.93bn | |
| TOUCH: | 674-676p | 12-MONTH HIGH: | 1,184p | LOW: 606p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 593p* | NET DEBT: | 54% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 0.23 | 41.3 | 66.4 | 55.0 |
| 2015 | 0.25 | 25.5 | 40.0 | 56.0 |
| 2016 | 0.72 | -174 | -51.0 | 30.0 |
| Year to | Turnover | Pre-tax | Earnings | Dividend |
| 31 Dec | (£bn) | profit (£m) | per share (p) | per share (p) |
| 2017 | 0.79 | -22.6 | -6.9 | 29.8 |
| 2018 | 2.94 | -18.9 | -12.2 | 32.0 |
| % change | +272 | - | - | +7 |
| Ex-div: | 14 Mar | |||
| Payment: | 25 Apr | |||
| *Includes intangible assets of £6.13bn, or 1,053p a share | ||||
