Results round-up

Engineered and power transmission products delivery group Renold warned of the impact that increased raw materials prices were having on its operating margins on Thursday, saying that its chain division, in particular, had suffered significant headwinds as a result.

Renold told investors on Friday that it was "making good progress" in passing additional costs on to customers; however, progress on the realisation of the price increases had been slower than the group had hoped for.

Combined with continued increases in raw materials prices in certain territories, together with the weakening US dollar, further sales price hikes would be necessary, the company added in a statement.

As a result, Renold expected to report revenue growth of "approximately 5% for the year ending 31 March 2018", but adjusted operating profit was tapped to fall "below previous expectations and slightly below the reported adjusted operating profit for the years ended 31 March 2016 and 31 March 2017."

Robert Purcell, chief executive of Renold, said, "The increase in raw material prices has been significant, both in scale and speed, and has challenged our ability to pass these costs through to customers at the same pace. The adverse impact on profit of timing differences between increasing costs and the off-setting sales price increases being realised has continued through the second half of the year."

"This is masking the positive effects of our strategic actions which are delivering organic growth across most chain and torque transmission business units. These actions have also improved the resilience of the group when faced with challenging conditions, as demonstrated by a third year of consistent profit delivery. We continue to remain focused on executing the group's strategy in order to deliver sustainable improvements in performance," he added.

Sports betting and gaming company GVC Holdings, which received shareholder approval for its merger with Ladbrokes Coral this week, posted a rise in full-year adjusted profit and net gaming revenue on Friday, thanks in part to the acquisition of bwin.party in 2015.

In the year to the end of December 2017, adjusted pre-tax profit jumped 182% to €178.7m on a pro-forma basis while net gaming revenue increased 17% to €925.6m. Meanwhile, total clean earnings before interest, tax, depreciation and amortisation rose 33% % to €274.2m.

On a statutory basis, the company’s loss before tax narrowed to €25.6m from €173.5m due to the exceptional items and amortisation associated with the acquisition of bwin.party.

Net gaming revenue in Sports Brands was up 20% on a pro-forma basis, driven by strong sports and gaming, while Games Brands saw NGR rise 12% on the back of investment in partypoker and a positive performance from casino brands.

GVC said it has enjoyed a "strong" start to the current year, with like-for-like NGR for the period up to 4 March up 16%, or 18% at constant currency, while expectations for the full year remain unchanged.

Chief executive officer Kenneth Alexander said: "GVC achieved a significant amount in 2017 and as these numbers demonstrate, we have delivered material value from the bwin.party acquisition. It is particularly pleasing that we have been able to produce such strong results at the same time as completing the integration of bwin.party and continuing to enhance our product offering.

"Our core markets offer attractive growth prospects but we also recognise the opportunity presented by our proprietary technology to create significant synergies through M&A. The importance of geographic diversification is also a key dynamic given the evolving regulatory backdrop. Thus the acquisition of Ladbrokes Coral Group represents an exciting opportunity, bringing together industry leading online and retail brands. There will be plenty of hard work ahead, but we are confident that GVC will deliver once again."

Berenberg said clean EBITDA was bang in line with its expectations, which were top of consensus. it also said that the 16% gain in NGR so far this year is "very strong" in the context of other gaming companies whic are either not disclosing NGR evolution year-to-date or indicating single-digit growth.

"As a reminder, consensus for GVC points to 5-6% year-on-year NGR growth on a like-for=like basis (i.e. excluding Turkey) for FY 2018. This strong start already suggests that, as usual, consensus numbers are very conservative (note that the World Cup in Q2/Q3 should have a positive impact on wagering, so growth is unlikely to slow down at last until midyear)."

It said GVC’s performance was better than peers in the first quarter because of a mix of structurally better sportsbetting margins, stronger gaming products and geographical diversification.