GVC Holdings managing costs, pulls interim dividend
Sports betting and gaming company GVC Holdings updated the market on Monday, providing further detail on the impact of the Covid-19 coronavirus pandemic and the mitigating wat was taking.
The FTSE 250 firm said it had started the year “well”, with group net gaming revenue ahead 1% and online net gaming up 19% higher in the first quarter.
However, it said the closure of retail outlets and the cancellation of sports events “significantly” reduced revenue from mid-March.
In previous announcements, GVC estimated the impact of Covid-19 before any mitigating actions equated to a reduction in EBITDA of about £100m per month.
However, following the initiation of a number of mitigating actions, it said it was now expecting to reduce the EBITDA impact to about £50m per month.
As a result, the board said the average monthly cash outflow would be limited to about £15m per month, adding that it was “confident” that further cost actions would enable it to achieve its target of reducing the cash flow to breakeven
GVC said its financial position remained robust, but added that given the ongoing uncertainty regarding timings of the easing of shutdown measures around the world, it had taken the “prudent decision” to withdraw the second interim dividend, that was due for payment on 23 April.
“As our first quarter trading numbers once again demonstrate, GVC is a business that, in normal times, delivers an outstanding performance,” said chief executive officer Kenneth Alexander.
“However, while our global and product diversification is standing us in good stead during the current uncertainty, the Covid-19 pandemic is posing an unprecedented challenge to our business and our industry."
At 0900 BST, shares in GVC Holdings were up 13.91% at 551p.