GVC update highlights danger of Greek turmoil

GVC update highlights danger of Greek turmoil

Wednesday, July 8, 2015
GVC has reported a "softening" of activity in the Greek gaming market

GVC Holdings has highlighted the possible effects of the continuing financial turmoil in Greece on the gaming industry during an otherwise strong H1 Trading Update.

The gaming operator – which is bidding to take over bwin.party - reported a “record-breaking” first half of 2015, with net gaming revenue (NGR) up 14 per cent year-on-year to €120m ($132m), despite football’s Fifa World Cup taking place in H1 of 2014.

However, GVC did explain that it was exposed in Greece through the revenue-sharing partnership with Athens-based Centric Holdings that it assumed when it bought Sportingbet in 2013 and has seen a “softening” of activity in the market.

“Following the recent imposition of capital controls by the government restricting the movement of funds both within and outside of Greece, the company notes that it has registered a softening in player activity in that territory,” GVC's statement said.

“GVC continues to monitor events. However it is too early to forecast what, if any, the implications will be, and whether they will have a material effect on the second half of the financial year for our Greek operations.”

Panmure Gordon analyst Karl Burns estimates that Greece, which faces a chaotic exit from the eurozone if it fails to reach a deal with its creditors, accounts for about 10 per cent of GVC’s revenues.

GVC provides Centric with a gambling technology platform and the Greek company markets the betting operation under local brands. The company said it remains confident in year end expectations, and has declared a dividend of €0.14, up five per cent on last year’s yield.

In the six months to June 30, sports wagers increased by 19 per cent year-on-year to €823m while customer deposits rose by 18 per cent to €1.7m per day.

The trading update comes in the same week that the Financial Times newspaper reported that GVC and Amaya’s joint bid for bwin.party is worth €1.3bn. The offer is said to be comprised of cash and stock, valuing bwin.party at around €1.53 per share.

Kenneth Alexander, chief executive of GVC, added: "I am delighted today to announce another record revenue performance for the half-year. Wagers, NGR, customer deposits continue to grow and the board remains confident for the outlook for the remainder of the year and beyond.”

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