GVC earnings surge after integration of bwin.party

Sports betting and gaming group and owner of the 'Foxy Bingo' brand GVC Holdings announced its audited results for the year to 31 December on Thursday, with pro forma sports wagers up 4% to €4.55bn, or up 7% at constant currencies.

The FTSE 250 firm said its pro forma sports margin was 9.6%, improving from 8.5% in 2015, while net gaming revenue was 9% higher at €894.6m, or 12% higher at constant currency.

Pro forma revenue was up 8% at €873.2m, or up 11% at constant currency, while clean EBITDA was 26% firmer at €205.7m.

Adjusted profit before tax was €93.8m, against €46.4m in 2015.

The board announced a second special dividend of 15.1 euro cents, giving a total dividend of 30 cents for the 2016 financial year.

Net debt stood at €131.5m, which the board pointed out was 0.6x clean EBITDA.

“The acquisition of bwin.party in February 2016 was our most ambitious transaction to date and through the hard work of our people we have once again demonstrated our ability to create significant shareholder value through selected acquisitions,” said chief executive officer Kenneth Alexander.

On the operational front, GVC successfully integrated the bwin.party group during the year, with the board saying it also improved its platform stability, and significantly improved the product offering.

Pro forma net gaming revenue from the sports labels was up 14%, or 16% in constant currencies, while the company also reported an improved sports win margin to 9.6% from 8.6% in 2015.

It said profirma gaming net gaming revenue from the acquired bwin sports labels was up 26%, while the value of first time deposits was 37% firmer.

Games labels pro forma net gaming revenue was down 4%, or flat in constant currency, while it was up 4% in constant currencies in the second half.

GVC said it was on target to achieve a €125m synergy run rate at end of 2017, and said 95% of group revenues were now derived or processed through its proprietary platform.

“Our strategy of pursuing international diversification and scale through leveraging our proprietary technology, is more appropriate today than at any time in our history,” Alexander added.

“The organic growth opportunity is equally exciting and we are confident of delivering further growth in 2017.”

Will Whitehorn appointed senior independent director

GVC also announced the appointment of Will Whitehorn to the company's board of directors as senior independent director on Thursday.

Whitehorn was currently the deputy chairman and senior independent director at passenger transport operator Stagecoach Group, and was also an independent non-executive director of Purplebricks Group.

He is also a member of the First Minister of Scotland's 'GlobalScot' business mentoring network, president of the Chartered Institute of Logistics and Transport and chairman of the Scottish Gallery and Scottish Event Campus.

“I am delighted that Will has agreed to join the board and we look forward to working with him,” said chairman Lee Feldman.

“He brings a wealth of innovative commercial experience and corporate knowledge.

“The appointment reflects the company's continuing commitment to broadening the skills-base of its board and enhancing its corporate governance practices following the move to the Premium Segment of the Official List in 2016.”

Will Whitehorn commented said he was “very excited” to be joining and contributing to the GVC team.

“It is a company which is growing in an industry that is changing dramatically due to new technology, competition and regulation.

“All of which means exciting opportunities and challenges ahead.”