Betboo earn-out revised and extended Reaffirmation of dividend policy Strong trading start to the year

Clarissa Elsner

Betboo Earn-out

In July 2009 the Group acquired its South American brand Betboo for an up-front payment of US$4million and an earn-out based on the sum of the profits for the two years to 30 June 2012 and five times the profits for the 12 months to 30 June 2012. The total purchase price was capped at US$30million.

The Board is pleased with the progress made by Betboo. Average daily Net Gaming Revenue (“NGR”) during Q1-2011 has been 97% higher than Q1-2010 and 30% up on Q4-2010. GVC continues to believe that the Latin American market represents an exciting growth opportunity for the Group.

To facilitate the level of investment the GVC Board feels necessary to take advantage of this growth opportunity and assure the continued focus of the strong, existing local management team, the Board has agreed a revised and extended earn-out structure under which the earn-out will now be based on regular monthly payments from 1 July 2011 plus a percentage of the NGR generated over the four year period to 31 December 2014, payable annually in arrears.

The spreading of the earn-out payments over a longer period will smooth the impact of the earn-out on the Group’s cash flow and allow the Group to maintain its current policy of distributing at least 75% of net operating cashflow to shareholders by way of dividend.

The financial features of the renegotiated earn out are as follows:

  • The total consideration remains capped at US$30million;
  • 25% of the NGR earned in each of the years ending 31 December 2011, 2012, 2013 and 2014 will be paid in annual instalments within six weeks of the end of each financial year; and
  • Monthly payments of US$157k will be made from 1 July 2011 to 1 June 2014, totalling US$5.65 million, conditional on the founders of Betboo remaining in the business.

The trading history of Betboo since its acquisition in July 2009 is shown below:

Betboo trading results – average per day

NGR Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11*
Sports 0.9 1.1 (0.6) (0.3) 3.2 0.9 3.6
Gaming 11.3 10.3 11.0 13.8 14.4 14.8 16.8
Total 12.2 11.4 10.4 13.5 17.6 15.7 20.4


*based on 51 day period from 1 January 2011 to 20 February 2011

Trading update – Mid-February 2011

There has been an encouraging start to the year for the Group. Total NGR for the seven weeks to 20 February is 19% ahead of Q4-2010 and 10% ahead Q1-2010.

  Q1-10 Q2-10 Q3-10 Q4-10 Q1-11*
Sports margin 13.4% 13.9% 22.9% 7.3% 16.8%
Sports NGR per day 24.8 27.4 31.0 12.3 37.9
Gaming NGR per day 132.3 125.6 114.9 133.6 135.7
Total NGR per day 157.1 153.0 145.9 145.9 173.6


The Group’s German-facing casino brand, CasinoClub remains highly profitable and cash generative. The Board is encouraged by moves in Europe to regulate eGaming and the Group is confident of sensible regulation in Germany with regards to the regulation of products as well as taxation levels. In anticipation of this positive regulation, the Group will be increasing its investment in CasinoClub over the next year to maximise shareholder value.


For further information:

GVC Holdings PLC
Kenneth Alexander, Chief Executive Officer Tel: +44 (0) 20 7398 7702
Richard Cooper, Group Finance Director


Arbuthnot Securities Limited Tel: +44 (0) 20 7012 2000
James Steel / Ed Gay

Media enquiries:

Henry Harrison-Topham / Oliver Hibberd Tel: +44 (0) 20 7398 7702


About GVC Holdings PLC

GVC Holdings PLC is a leading online gaming company. The Group is headquartered in the Isle of Man and is licensed in Malta, and the Netherlands Antilles.

In December 2004, the shares of Gaming VC Holdings S.A., GVC’s predecessor company, were admitted to the AIM market of the London Stock Exchange. The GVC Group has not and has never transacted wagering activity by players in the US. Further information on the Group is available at