GVC Holdings to pay special dividend ahead of schedule

Sports betting company GVC Holdings is to pay a special dividend ahead of schedule following two acquisitions and positive trading for the year so far.

The FTSE 250 company said it intends to pay a dividend of 10 cents per share in February for the 2016 financial year, due to positive trading and a new loan.

GVC was able to pay the dividend as it gained the funds from a €250m loan from Nomura International to repay its original €400m unsecured loan to Cerberus Business Finance that it had taken out to finance its acquisition of rival bwin.party in February.

The company will now be able to repay the outstanding €386.5m balance of the Cerberus loan before 2 February.

It plans to adopt a dividend policy of paying 50% of yearly free cash flow, starting in the 2017 financial year, for payments to be made biannually with a split of 40% and 60% between the interim and final payment, and is also considering paying future excess cash to shareholders in special dividends or share buybacks.

Chief executive Kenneth Alexander said: "As we did following the Sportingbet acquisition, through the rapid integration of bwin.party and a solid trading performance, GVC expects to recommence the payment of dividends ahead of schedule.

“Our shareholders have been highly supportive and it is pleasing to be able to reward them with a dividend sooner than we had originally anticipated.”

Meanwhile, the company reported that pro-forma daily net gaming revenue for the quarter ended 30 September increased 12%, compared to last year, or 15% in constant currency.

Sports gross win margin was 10.5%, up from 9.3% last year, with daily amounts wagered 3% higher year-on-year, or 5% in constant currency.

Daily net gaming revenue from games and other products also rose 12%, or 15% in constant currency.

The company said the fourth quarter has started well as pro forma daily net gaming revenue climbed 8%, or 10% in constant currency, compared to the “tough” fourth quarter last year, which was the strongest period in 2015.

Shares in GVC Holdings were up 2.46% to 702.88p at 0830 GMT.