GVC's Coral, Ladbrokes refuse rent payments - report
Bookmaking company GVC's Ladbrokes and Coral UK operations are refusing to pay rent on more than 3,000 shops to save cash as the coronavirus pandemic hammered profits, Sky News reported on Friday.
The two businesses withheld rent payments last week and GVC said it would make up the deficit when "normal" trading conditions resume. High Street shops have been hit by the UK government lockdown last month that closed all but essential stores.
GVC, which announced last year that it would close 900 of its UK betting shops, has furloughed 14,000 staff under the government's Coronavirus Job Retention Scheme.
The company confirmed it had “taken the difficult decision to temporary place on hold rental payments to its landlords”.
“The decision has been taken in order to ensure as many shops are in a position to reopen once the current crisis abates. The group fully intends to make-up the shortfall once normal trading conditions resume.”
"We have written to our landlords to inform them and request their understanding of the decision, which will not only help to secure the long-term future of their rental incomes but also the jobs of over 15,000 retail colleagues."
GVC 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.
"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 core earnings for the year will be reduced by about £130m to £150m before any mitigating actions.
This was based on a scenario where the European football championship was postponed until 2021 and all other football cancelled until July 2020, major horse racing events such as Aintree and Royal Ascot were cancelled and other horse racing continued behind closed doors; and the retail estate in the UK remained open for business
However, if UK shops are closed, this would incrementally cut earnings by around £45m to £50m a month, including employment costs of approximately £20m per month.