Facing Challenges At Home UK Gambling Giant GVC Hopeful With Global Online Operations

Facing Challenges At Home UK Gambling Giant GVC Hopeful With Global Online Operations

Amidst the critical issues facing their retail business at home, GVC Holdings, a leading UK-listed gambling company is relying on its expanding global online networks and increasing presence in the US market. With GVC’s financial report for the fiscal year 2018 released on Tuesday it is clear that the GVC has witnessed a positive impact on their overall financial statement following the successful completion of 3 deals including the Ladbrokes Coral acquisition, and two separate deals with Neds and Crystalbet.

In the year 2018, their Net Gaming Revenue (NGR) grew at a welcome pace as they reported a 9% increment from 2017. The current NGR is valued at £3.57b. Further, GVC’s gross profit surged by 7% to £2.4b while both the underlying earnings and underlying profits accentuated by 13% to £755.3m and 19% to £610m respectively. Though the underlying profits grew by 300% to £434.6m without tax deductions, GVC still had to register a net loss of £56.4m. The decline is largely attributed to the non-cash intangible assets that were written off during the financial year 2018.

Going by the report, it is clear that GVC amassed their majority underlying earnings from their online operations, Bwin and PartyPoker brands in particular. The popular GVC sports brands including Bwin, Crystalbet, Coral, Ladbrokes, Neds, Eurobet, and Sportingbet registered a massive 20% growth as they brought in the £1.54b of the gambling giant’s online NGR. Leading the revenue race were the top legacy brands that witnessed a 27% hike in the NGR compared to the previous year. While the GVC’s legacy and online sports brands rocked the 2018 financial report, their game brands have not been much behind with CasinoClub, Foxy Bingo, Gala, Gioco Digitale, PartyPoker and PartyCasino getting a 16% push in their NGR to £351.4m. However, the gem amongst the brands which have demonstrated impressive performance and growth for 2018 for GVC is PartyPoker which continues to maintain its growth saga at an enigmatic pace of 40% every year.

On the other hand, the GVCs retail NGR for UK is concerning as it reported a 5% decline settling at £1.33b. This situation is for GVCs home business is not getting better any soon as the Fixed-Odds Betting Terminals (FOBT) coming into effect from April 1, 2019, will take a toll on the GVCs domestic retail operations. On a positive note, GVC management is hopeful that their global expansion will allow them to sustain the amidst the dampening UK retail business.

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