GVC completes refinancing after particularly strong Q4

Multinational sports betting and gaming group and owner of the 'Foxy Bingo' brand GVC Holdings provided a trading and refinancing update on Thursday, ahead of the publication of its full year results 23 March.

The FTSE 250 company confirmed it has now repaid in full the outstanding loan of €386m provided by Cerberus Business Finance, through a combination of existing cash resources and the drawdown of the €250m loan from Nomura International.

As it had previously stated, under the new facility the group's interest payments will be materially lower in 2017, than they would have been had the Cerberus loan remained in place.

In the fourth quarter to 31 December, GVC said net gaming revenue (NGR) per day was €2.51m - an increase of 7%, or 9% in constant currency, over the same period in 2015.

The board called that a “particularly pleasing performance”, given the adverse sports results in the last few weeks of the year and the strong comparative period in 2015.

It said the quarter produced the highest daily NGR run rate of 2016.

“The international diversity of our business combined with a proven portfolio of both sports and gaming brands helped cushion us against particularly punter friendly sports results in the UK and adverse currency movements in some of our markets,” the board explained in a statement.

In light of the strong final quarter, the board said it now anticipates reporting pro forma group NGR for the year of €894m, an increase of 9% on the previous year and slightly ahead of previous guidance.

On a constant currency basis pro forma NGR growth was 12%.

The board added that it expects pro forma clean EBITDA to be towards the upper end of market expectations, and net debt of approximately €140m including gross cash of €373m as at 31 December.

It also confirmed that the special dividend of 12.5p per share will be paid to shareholders on 14 February.

“2016 was a landmark year for GVC in which the group undertook its largest and most ambitious acquisition to date, that of bwin.party,” said CEO Kenneth Alexander.

“Through the tremendous hard work of our people, we achieved and exceeded many of our goals and once again we were able to create significant shareholder value.

“In addition to returning bwin.party to growth, we remain on target to secure €125m of synergies by the end of the current year.”

Alexander said the positive trading momentum experienced in 2016 continued with a particularly strong start to 2017.

Pro forma daily NGR for the month of January was up 21%, or 23% in constant currency, against the same period in 2016.

“Our strategy of pursuing international diversification and scale, through the leverage of our proprietary technology and talented people, is more relevant today than ever.

“We are excited about the organic opportunities for the group in 2017 and beyond, but also remain alive to further industry consolidation.”