GVC posts soaring sales but store closures loom
Revenue jumped to £2.9 billion.
Ladbrokes owner GVC has posted soaring full-year sales but again warned that new rules for fixed-odds betting terminals will see around 1,000 shops shut.
Revenue jumped from £789.9 million to £2.9 billion in 2018 on a reported basis and was up 8% proforma at £3.5 billion, driven by a strong World Cup performance and the integration of Ladbrokes.
The group posted an £18.9 million pre-tax loss in 2018, an improvement on the £22.6 million the prior year.
GVC said profits were dragged down by £322.5 million of amortisation charges linked to its £4 billion acquisition of Ladbrokes Coral in March last year.
However, group underlying profit before tax came in at £434.6 million, up from £151 million.
GVC also reiterated that a Government move to cut the maximum stake for fixed-odds betting terminals (FOBTs) to £2 will result in the closure of around 1,000 Ladbrokes Coral shops.
The firm said this will hit earnings by £135 million in 2019, adding that it is trying to transition to a “smaller, right-sized and more sustainable estate” as smoothly as possible.
But boss Kenneth Alexander said that the firm is “well-placed” to absorb the impact of the new regulations.
He added: “2018 was a transformational year for the group with the completion of the Ladbrokes Coral acquisition in March making the group the largest online-led sports-betting and gaming operator in the world.
“Excellent operational execution, effective marketing and a good World Cup helped both the legacy GVC and the acquired Ladbrokes Coral businesses perform ahead of expectations and materially ahead of the market, delivering market share gains in all our major territories.”
However, UK retail net gaming revenue was 3% down on a like-for-like basis and 5% on a total basis.
GVC is now turning its attention to taking advantage of deregulation in the US, which has allowed states to legalise sports betting.
To this end, it recently signed a deal for a joint venture with American casino group MGM Resorts.