GVC posts strong Q4 results
UK gambling giant GVC has announced a 15% rise in online net gaming revenue for 2018. The UK markets performed well with a 12% upturn in the company’s 2018 Q4 financial results.
Despite a turbulent time within the UK gambling industry, GVC has posted encouraging figures in their Q4 financial results. The owner of Ladbrokes Coral declared that full-year online revenues increased by 19% to €1.86bn.
The company’s sports brands, which also include Bwin and Sportingbet, enjoyed an increase of 14% in net gaming revenue. The gross win percentage throughout the sporting brands was 10.7%. The legacy brands of Bwin and Sportingbet outperformed Ladbrokes Coral with very impressive growth rates of 21% in net gaming revenue across all territories.
GVC’s non-sporting products performed even better with partypoker’s net gaming revenue increasing by 43%. Gala showed their value to the group with an 18% increase in net gaming revenue. The overall picture for the casino brand division is healthy with a 13% improvement throughout the brands. The company revealed that 22% of the net gaming revenue is re-invested in promotional costs.
While the net gaming revenue increase for the online division of GVC makes good reading for investors, the health of the traditional bookmaker model with retail shops is less certain. Retail figures for net gaming revenue were down by 3%. Further, despite a 3% increase in FOBTs activity, betting revenue was down 10% in stores.
The biggest test for the retail model will be when in April the new limits on FOBTs come into effect. With a large slice of retail bookmakers profits coming from these machines, there is pressure to replace the reduced income stream. GVC has been heavily looking to expand its USA footprint and has been aggressive in forming partnerships stateside.
Rather than being anxious about the coming year, CEO Kenny Alexander welcomed the healthy results. He believed the company was perfectly placed for the New Year, saying:
As the Group carries this momentum forward into the new year, and starts to deliver the opportunities provided by both the Ladbrokes Coral integration and our sports-betting joint-venture in the US with MGM Resorts, the Board is confident that the Group is very well placed for a successful 2019.–Kenny Alexander, GVC director.
Market analyst Paul Leyland welcomed the company’s results but warned that the company faced several challenges, especially in regards to future regulation. He admitted that GVC had done a good job in acquiring failing companies and transforming them into short to mid-term successes, but fears markets like Germany, Italy, and Sweden are likely to remain in a regulatory state of flux.