GVC outshines bwin.party rivals 888 in H1

GVC outshines bwin.party rivals 888 in H1

Friday, August 28, 2015
Norbert Teufelberger was positive about bwin.party's performance

888 has delivered a rallying call over its takeover bid for bwin.party as it reported a drop in H1 profits and turnover on the same day that rival GVC announced growth in revenue and earnings.

888 reported a 41 per cent year-on-year drop in pre-tax profit for the six months to June 30 to $20m (€17.7m), while revenue declined two per cent to $220m. 

Sportingbet owner GVC saw wagers up 18.6 per cent to €824m, net gaming revenue up 15.1 per cent to €121m while earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 14 per cent to €25.5m.

However, in a separate statement, 888 acted to reassure shareholders about its prime position in the battle for Bwin.party, which yesterday said that “key aspects of GVC's proposal have now been addressed to [our] satisfaction”.

“The board continues to believe that the combination of the 888 and bwin.party businesses announced on July 17 under the 888 management team would generate significant value for both sets of shareholders,” read the statement.

“Following a detailed due diligence exercise, 888 made an offer comprising a significant cash component along with an approximate 49 per cent ownership interest in the combined business. This offer was unanimously recommended by bwin.party.

“The board continues to believe that its offer is of significantly greater intrinsic value than the proposal outlined by GVC on August 24.”

On a busy day for results, bwin.party itself also reported a drop in revenue with €296.5m down six per cent on 2014, while EBITDA was up by two per cent to €47.3m.

Both bwin.party and 888 pointed to taxation changes and the effect of the Fifa World Cup taking place in H1 2014 for the decline in their performances in 2015.

Norbert Teufelberger, bwin.party chief executive, said: “Our progress on non-core asset disposals and other cost saving initiatives is running ahead of plan - excluding the impact of EU VAT and UK point of consumption tax, clean EBITDA would have increased by 24 per cent.”

Having announced positive results, GVC chief executive Kenneth Alexander said that his company expects a strong second half of 2015.

Alexander added: “GVC continues to show strong financial performance, with growth in revenue, clean EBITDA and dividends. We are highly confident for the rest of the year.

“With our track record of delivering value through organic growth and acquisitions we are determined that GVC will play an important role in the continuing consolidation of the online gaming sector.”

GVC’s latest proposed bid for bwin.party is 124p per share, with 888’s offer of 104.9p submitted in July and recommended by the bwin.party board.

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