GVC says customer diversity will shield it from Brexit

GVC says customer diversity will shield it from Brexit

Wednesday, July 13, 2016 Posted by Andy McCarron
Kenneth Alexander said GVC had favourable sports results during Euro 2016

Online gaming firm GVC Holdings, which operates brands such as Bwin, Party Poker and Sportingbet, believes that the UK’s decision to leave the EU will not harm the group, at least for the foreseeable future.

In a trading statement for the first six months of the year, the company revealed that its wide customer base means that it is insulated from any of the immediate implications.

It said: “From an operational perspective, in the short to medium-term the GVC Board believes that UK referendum result to leave the EU will have little or no material impact on the Group. GVC is a diverse business, operating multiple brands and product verticals, with more than 90% of its customer base outside the UK.

“The Board is confident that this diversity gives the Group significant flexibility to face any potential long-term challenges that may arise from the UK's decision to leave the EU.”

It’s been a promising start to 2016 for the company. GVC brands grew by 15% and bwin.party brands grew by 9% pro forma year on year on a constant currency basis, with total pro forma NGR up 8% to €439 million.

The start of the Euros was also beneficial with ‘particularly favourable results’ during the first half of the tournament driving an above average sports margin for the second quarter, 9.9% against 7.9% for the same period the year before.

Following the acquisition of bwin.party on 1 February 2016, the Board has also confirmed that it is on track to realise €125 million of synergies by the end of 2017 as the integration of the enlarged Group is progressing ‘in line with expectations’.

CEO Kenneth Alexander said: "I am pleased to report that in the first half of 2016 GVC has continued to deliver positive trading momentum. Q2 was particularly strong, helped by increasing volumes and favourable sports results during Euro 2016. The restructuring of the enlarged Group is progressing well with synergy targets being achieved, accompanied by strong underlying growth.

“We are very encouraged by the positive performance to date, however, it is still early days and there is much work to be done, nevertheless, the board remains confident for the remainder of 2016."

Totally Gaming Says: “GVC’s Europe-wide and beyond footprint will protect it from the buffeting of the UK economy caused by Brexit. The company’s biggest challenge is the integration of the bwin.party operations and the 9 digit synergy savings that it is promising. However GVC has a history of successful acquisitions, so the expertise needed to handle such an integration is on hand.”

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