GVC Holdings expects strong profits after record fourth quarter

Online gambling group GVC Holdings said profits would be at the top end of its expected range after a record level of net gaming revenue in the final quarter of 2017.

NGR of €279.5m in the fourth quarter was up 21% on the same period last year, or 25% at constant currency rates or 31% on an underlying basis, which excludes acquisitions and disposals undertaken in 2017.

As a result, NGR will be close to €1.01bn for the calendar year, up 18% on an underlying basis.

GVC, which agreed a merger with Ladbrokes Coral in the week before Christmas, now expects earnings before interest, tax, depreciation and amortisation for the year to be "at the top end of management's internal expectations".

Chief executive Kenneth Alexander said the growth in gaming revenues reflected "the strength of our brands, technology and the hard work of our talented people" and "demonstrated our ability to integrate significant acquisitions, realise material synergies and at the same time deliver top line growth".

Daily NGR for sports betting and gaming was €2.28m in the fourth quarter, up 24%, or 37% underlying. Betting and gaming brands include Bwin, Sportingbet and Foxy Bingo.

The gross win margin in the quarter of 13.1% was significantly ahead of the expected long-term average of 10%, with daily sports NGR up 54% on an underlying basis.

The well above average gross win margin predictably reduced recycling, with wagers down 11% in the quarter, which was predominantly due to the sale of the Turkish business in early November. On an underlying basis, wager were just 1% lower.

Despite the high gross win margin, sports gaming revenues rose 14% or 21% on an underlying basis, helped by improved product and cross-selling across brands.