GVC Holdings to take up to £150m hit from sports cancellations

GVC Holdings said on Monday that full-year earnings could be hit by as much as £150m if horse racing and football events are cancelled or delayed due to the coronavirus.

The Ladbrokes owner noted that the spread of the virus has impacted a number of live sporting events. It pointed out that in the year to the end of December 2019, around 45% of its group net gaming revenue was generated from sporting events, with 43% of its online NGR generated from sports.

"While it is difficult to quantify the precise impact on earnings it is clear that a significant reduction in sporting events will have a material impact on EBITDA in the current financial year," it said.

The company said earnings before interest, tax, depreciation and amortisation for the year will be reduced by about £130m to £150m before any mitigating actions. This is based on a scenario where the Euros are postponed until 2021 and all other football cancelled until July 2020, major horse racing events such as Aintree and Royal Ascot are cancelled and other horse racing continues behind closed doors; and the retail estate in the UK will remain open for business. Also included in the scenario, its stores in Italy and Belgium remain closed for three months.

However, if UK shops are closed, this would incrementally reduce EBITDA by around £45m to £50m a month, which includes employment costs of approximately £20m per month.

Chief executive officer Kenneth Alexander said: "While we do not underestimate the challenge presented by Covid-19, GVC is in a robust position to manage the impact on our operations. We are a diverse global business, with an experienced and expert management team, which operates across multiple products and markets. Our priority is to protect our employees while maintaining our offer to our customers at this difficult time."