GVC Holdings hikes dividend despite big 'one'off' charges

GVC Holdings posted a big full-year loss on the back of big amortisation and impairmemt charges, but hiked its dividend payout.

For the year ending on 31 December, the sports betting group said that its reported loss, which included the acquisition of Coral Ladbrokes in March 2018, more than doubled from -£56.4 to -£140.7m because of £630.1m in extraordinary non-cash charges.

The company incurred in a £376.2m charge linked to the amortisation of intangibles acquired primarily from Ladbrokes Coral and bwin, and a £245.0m impairment of its Australian online business.

Hence, on a diluted and as reported basis, the company's loss per share widened from -12.2p in 2018 to -26.4p.

Net gaming revenues were 3% higher in proforma and constant currency terms to £3,665.1m, drive by string performances in Online European Retail and UK Retail over-the-counter.

Yet in proforma terms, underlying earnings before interest, taxes, depreciation and amortisation were 10% lower to £678.3m.

The company however pointed out that excluding the impact of the government's Triennial Review, which capped the size of bets on fixed odds betting terminals at £2, as well as incremental taxes, then underlying operating profits were up by 14% and 50% ahead of what the consensus had estimated at the start of 2019.

Adjusting for the change in the IFRS 16 accounting principle for leases meanwhile, which resulted in £347.1m of net debt, the company's debt pile fell from £1,896.6, to £1,822.7m.

Chief executive officer Kenneth Alexander warned that over-regulation in Britain could see customers go to the black market "where there is zero responsibility, zero protection and zero tax being paid to the Treasury."

Yet Alexander expressed confidence in that the outfit's "broad international footprint, proven track record of acquisition and strong organic growth will continue to present significant opportunities for further expansion."

A second interim dividend of 17.6p took the full-year payout to 35.2p, for an increase of 10% versus 2018.

As of 1351 GMT, shares of GVC were trading down by 3.74% to 777.4p.