Strong online and European retail performances boost GVC in Q3

Strong online and European retail performances boost GVC in Q3

Thursday, October 18, 2018 Posted by News Team
GVC
UK retail struggles, with revenue down 2% year-on-year

GVC Holdings has reported a 14% year-on-year rise in net gaming revenue for the third quarter of 2018.

While the operator did not release figures for the period, it said that online revenue had increased 28% for the three months ended September 30th. The sports betting vertical benefited from the final stages of the FIFA World Cup, with stakes up 16% and revenue across all sports brands growing 31% from Q3 2017. 

Revenue from GVC’s games brands were up 19%, with partypoker continuing to perform particularly well. The poker brand was boosted by its extensive live event tournaments and increased marketing investment, which led to revenue growing 43% year-on-year. 

Both the Gala brands acquired from Ladbrokes Coral, and GVC’s legacy casino brands saw revenue grow by 18%, largely as a result of first-time depositors. 

Looking at GVC’s performance on a market-by-market basis, the operator’s legacy brands continued to perform well, with net gaming revenue up 43%. This broke down to a 30% increase in German NGR; a 14% increase in Italy and 13% growth in Brazil, with the performance driven by strong product, good customer user experience and brand marketing. 

The Georgia-facing Crystalbet business, acquired in March this year, also performed well, contributing to the growth of GVC’s legacy brands. 

The acquired Ladbrokes Coral online brands, meanwhile, also enjoyed strong quarters. Ladbrokes.com and Coral.co.uk saw revenue grow 23% and 29% respectively, with GVC noting that sports betting growth was particularly strong in September. 

Italian NGR, from the Eurobet brand, was 21% up year-on-year, while Ladbrokes’ Australian business posted a 5% increase in revenue, after staking growth was offset by weaker margins. 

GVC’s retail business posted more mixed results, with UK like-for-like revenue falling 2% from Q3 2017. Over the counter wagers were down 4%, with over-the-counter gross win margin falling 0.2 percentage points from the previous year. Machines revenue was up 1%.

European retail, on the other hand, reported a 24% increase in revenue. Eurobet’s retail business in particular benefitted from the World Cup, which the operator said was responsible for 6 percentage points of growth during the quarter. 

“The Group’s performance in the quarter was very pleasing with momentum continuing across the Online and European Retail divisions,” GVC chief executive Kenny Alexander said. “As highlighted in our H1 results, we will look to consolidate our position in markets where we are taking market share through the reinvestment of excess returns, and the board is confident in its full year expectations. 

“The industry continues to evolve and whilst there are challenges there are also many exciting opportunities. Through our proprietary technology, portfolio of brands, leading product and talent, GVC is well placed to continue to deliver shareholder value.”

The third quarter saw GVC strengthen its US operations, with the Android mobile app developed through its New Jersey-focused joint venture with MGM Resorts soft-launching. An iOS variant is to follow imminently, at which point the partners are to launch a major marketing campaign to promote the playMGM brand. 

Though the joint venture, the partners have signed a market access agreement with the United Auburn Indian Community, providing a route into the Californian market should the state legalise sports betting. 

“We believe our sports-betting joint venture with MGM is best placed to be the market leader in the US and we have taken the first steps on that journey with the soft-launch of our sports-betting app in New Jersey,” Alexander explained. 

The end of the quarter has also seen the operator launch a series of new CSR measures including a major financial investment in responsible gaming and community initiatives, as well as voicing its support for a pre-watershed ban on TV advertising around live sport. 

Finally, GVC said that expects UK Chancellor Philip Hammond’s budget on October 29th to provide more clarity on the date from which maximum fixed odds betting terminal (FOBT) stakes will be slashed to £2. While there have been various media reports about a delay in the implementation of the cut, GVC noted that it expects the legislation to be enacted in 2018.

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