GVC Holdings PLC (AIM:GVC), the multinational sports betting and gaming group, today announces its Interim Results for the six-months ended 30 June 2014 together with its quarterly dividend and a special dividend.

Highlights Chief Executive’s Report Group Finance Director’s Report Income Statement Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Statement of CashFlows Notes

Download The full results are available to download in PDF format.

 

 

Dividend

• Quarterly dividend of 12.5 €cents (2013: 10.5 €cents)
• Additional special dividend of 2.5 €cents (2013: nil)
• Total quarterly dividend is 15 €cents, up 43% on same quarter last year (2013: 10.5 €cents)
• Cumulative dividends payable in calendar year 2014, 55 €cents. Total up 96% over prior year (2013: 28 €cents)

Financial highlights

• Wagers up 38% to €694 million (H1-2013: €502 million)
• Sports margin 9.9% (H1-2013: 10.3%)
• Net Gaming Revenue (“NGR”) up 44% to €105 million (H1-2013: €73 million)
• Contribution up 25% to €57 million (H1-2013: €46 million)
• Clean EBITDA up 26% to €22.4 million (H1-2013: €17.8 million)
• Strong start to Q3-2014: trading per day, at €628k is 20% higher than Q3-2013 (€523k)

Operational metrics

• A leading operator of in-play markets with over 4,000 concurrent markets
• A market leading sports-trading team generating 10% margin
• Current number of active customers up 22% on prior year
• New depositing customers, 56k in Q3-2014,up 30% on Q3-2013
• Deposits up 22% on Q3-2013
• Enhancement of mobile product and sportsbook planned for 2015
• In-play generating 70% of sports gross margin
• Mobile generating 22% of sportsbook revenues

Commenting on the results, Kenneth Alexander, Chief Executive of GVC Holdings plc, said: “GVC operates in numerous markets in both casino and sports betting and as a group is well diversified and highly cash generative. GVC is now in a very strong position with exciting growth prospects as we continue to develop our market leading in-house sportsbook and mobile platform. The Group remains highly confident for the outcome of this current financial year and this confidence is reflected in the enhanced dividend that we have announced today.”

 

For further information:

GVC Holdings PLC
Kenneth Alexander, Chief Executive	Tel: +44 (0) 1624 652 559
Richard Cooper, Group Finance Director	www.gvc-plc.com
Daniel Stewart & Company Plc	Tel: +44 (0) 20 7776 6550
Paul Shackleton / Mark Treharne	www.danielstewart.co.uk

Media enquiries:

Abchurch
Henry Harrison-Topham / Jamie Hooper	Tel: +44 (0) 20 7398 7702
henry.ht@abchurch-group.com	www.abchurch-group.com

 

About GVC Holdings PLC

GVC Holdings PLC is a multinational sports betting and gaming group. Its core brands are CasinoClub, Betboo and Sportingbet. The Group has over 600 employees and is headquartered in the Isle of Man and is licensed in Malta, Germany, Denmark, UK, South Africa, Italy, Alderney and the Dutch Caribbean.

Further information on the Group is available at www.gvc-plc.com

 

Chief Executive’s Report

The Group has had an excellent 2014 so far, with a very strong performance during the World Cup, which has built on the success of the complete restructuring of the Sportingbet business that GVC acquired in 2013.

The Board is delighted to announce today a second special dividend in this year, this time allowing our shareholders to participate in GVC’s successful World Cup performance during which, customer acquisition accelerated, sports margins were strong and systems proved very robust.

During 2014 the Group has declared a dividend of 11.5 €cents per share (“€cps”) in January 2014, 16.0 (12.5+3.5) €cps in April 2014, 12.5 €cps in July 2014 and now 15 €cps (12.5+2.5) in September 2014, bringing the total dividend declarations to 55 €cps for the year to date, and being 96% higher than in 2013 despite an additional 30 million shares in issue.

GVC’s commitment to highly cash generative markets does not however come at the expense of investing in the future. GVC will continue to invest and develop its in-house sportsbook and mobile technology to maximise the Group’s growth prospects and generate the cash crucial to its aggressive dividend policy.

The Group’s Latam business continues to grow impressively and remains the market leader in Latam for sports betting.  Furthermore, the Group demonstrated its commitment to widening its geographical offering by the 15% investment in the Scandinavian start-up venture, Betit, who in the short space of time since its launch has captured meaningful market share in the Scandinavian online casino market across its brands.

GVC’s relentless focus on the customer journey is applied across all markets and the Group’s customer facing teams are incentivised to deliver a positive experience to our customers.

KPI summary €000’s	Sports wagers per day	Sports NGR per day	Gaming NGR per day	Total NGR per day
Q1-2013¶	1,894	209	185	394
Q2-2013	3,637	275	273	548
H1-2013	2,771	242	229	472
Q3-2013	3,335	267	256	523
Q4-2013	3,926	244	285	529
H2-2013	3,631	255	271	526
Q1-2014	3,765	278	281	559
Q2-2014	3,907	296	306	602
H1-2014	3,836	287	293	580
YoY increase	38.4%	19%	27%	23%
Q3-2014*	3,894	325	303	628
YoY increase	17%	22%	18%	20%

* to midnight Thursday 18 September 2014
¶ based on pro-forma revenues

Both sports wagers and NGR per day have increased quarter on quarter and NGR per day is now averaging €628k.

The relative mix between sports NGR and other revenues has remained relatively static at just under 50% (H1-2013: 51%; H2-2013: 49%), but in-play now amounts to 70% of wagering, and mobile was around 22% up from a low base of 8% in H1-2013 before GVC started investing in it.

Operationally, current trading across all measures is at least 20% higher than in 2013:

• Deposit values were up 22% in Q3-2013;
• Active and new depositing customers were up 30% on the same period last year.

Platform ability

Under GVC’s tenure, the Sportsbook platform has been developed to give significantly greater latency, response time and volume capability. In the last quarter the uptime has been 99.999%, handling over 4,000 concurrent events, more than 100% higher than the same period in 2013. The number of sports bets placed per day during Q2-2014 averaged 212,000 up 27% on Q2-2013 which averaged 167,000.

Dividend

The quarterly and special dividend totalling 15 €cent per share will be payable on Monday 3 November 2014 to shareholders on the register (“the record date”) on Friday 10 October 2014. The shares will go “ex-dividend” on Thursday 9 October 2014.

Outlook

The Board remains highly confident for 2014 and this confidence is expressed in the enhanced dividend declared today. We look forward to providing further trading updates in December 2014 and January 2015.

 

Kenneth Alexander
Chief Executive
22 September 2014

 

Group Finance Director’s Report

I start my report by summarising the business model of the Group and expressing this into “figures per day.” This accords with our preferred KPI disclosures. Section 2 of my report summarises the primary Financial Statements along with a short explanation behind material movements in the figures.

SECTION 1: Summary of business model based upon H1-2014
(Subject to roundings)

€000’s	Total		Per Day H1-2014
Wagers per day	694,320		3,836
Sports margin %	9.9%		–
Gross margin	68,744		380
Add-on revenue less all bonuses	21,187		116
Sportsbook revenue	89,931		496
CasinoClub revenue	15,135		84
Total revenue	105,066		580
EBITDA margin	21.3%		–
EBITDA	22,355
Non-P&L outflows*	(4,040)
Net cashflow available for other uses	18,315
Dividends paid in period	16,755
% of available cashflow distributed	91%

*the principal component of this were funds paid in pursuance of the Betboo earn-out

SECTION 2: Summary of financial disclosures

(In € millions)	H1-2014		H1-2013
INCOME STATEMENT EXTRACTS
Sports wagers	694.3		501.5
Pro-forma revenue	105.1		85.3
Total revenue	105.1		73.2
Contribution	56.7		45.6
Other operating costs	(34.3)		(27.8)
Clean EBITDA	22.4		17.8
Non-cash operating costs	(1.9)		(2.0)
Exceptional items	–		(13.8)
Financial income	0.0		0.8
Financial expense	(0.9)		(0.9)
Profit before tax	19.6		1.9
Key ratios
Contribution margin (contribution/pro-forma revenue)	54.0%		53.4%
Clean EBITDA margin (clean EBITDA/proforma revenue)	21.3%		20.9%
BALANCE SHEET EXTRACTS	30.6.14		30.6.13
Non-current assets	156.9		152.5
Net current assets before loans and leases	1.4		7.6
Loan from William Hill	(8.1)		(7.3)
Finance leases	(1.7)		–
Betboo deferred consideration	(4.8)		(10.6)
Total net assets	143.7		142.2
CASHFLOW EXTRACTS	H1-2014		H1-2013
Clean EBITDA	22.4		17.8
Exceptional items, contribution and costs relating to the acquisition of Sportingbet	–		(13.8)
Contribution from William Hill to the acquisition of Sportingbet	–		42.6
Loan from William Hill	–		8.0
Working capital movements including liabilities pursuant to the acquisition	(0.8)		(28.3)
Betboo earn-out payments	(3.1)		(2.5)
Purchase of non-current assets	(0.2)		–
Trade investment in Betit (including costs)	(3.6)		–
Finance lease payments	(0.5)		–
Net corporate tax payments	(0.2)		(0.1)
Share option subscriptions	–		0.2
Cash at start of period	18.8		6.6
Dividends	(16.8)		(2.2)
Cash at end of period	16.0		28.3

Group revenues at €105.1 million were 43.6% ahead of the same period last year.

Contribution at €56.7 million rose by 24.5%. The contribution margin was 54%. This reflects the investments made ahead of and during the World Cup, particularly in Latin America where the Group raised marketing expenditure by €4.5 million in this one region alone.

Clean EBITDA rose €4.6 million, 25.6% or 7.5 €cents per share to €22.4 million.

Non-cash items of operating expenditure (share option charges, depreciation and amortisation) fell to €1.9 million from €2.0 million.

Exceptional items H1-2014: €zero. H1-2013 reflected restructuring costs following the Sportingbet acquisition.

Financial income. The credit in H1-2013 is attributable to a one-off imputed interest credit on the interest-free loan from William Hill, drawn-down in H1-2013. It is a non-cash item.

Net current assets before betting tax accruals and loan instruments, have fallen due a higher value of dividend paid during the period (€16.8 million in H1-2014 compared to €2.2 million in H1-2013).

Betting tax accruals have naturally increased substantially as GVC is paying betting taxes in six markets, where local taxes are levied.

William Hill loan. This has remained static in underlying terms, but a strengthening in GBP since 30 June 2014 (1.25, up from 1.17 at 30 June 2013) has increased the liability as measured in Euros.

Cashflow. The key points on the Group’s cashflow are:

• 15% stake in Betit, €3.5 million plus associated costs
• A modest amount repayable to finance lease houses (€0.5 million; H1-2012 €nil) in furtherance to acquisitions of computer hardware for the Group’s growing data centers.
• Continuation of working capital absorption as the Group grows.

Share capital

The Group issued 216,513 shares to employees and consultants between 30 June 2013 and 30 June 2014. On 1 July 2014, a further 343,053 shares were issued to third parties following their underwriting commitments pursuant to the Sportingbet acquisition in 2013.

As announced on 2 June 2014, the Company granted a total of 3,100,000 nil cost share options; 2,100,000 to directors and 1,000,000 to senior executives.  The awards will vest in full and become exercisable on the share price being equal to or exceeding £6.00 per share for a continuous period of 90 calendar days at any time from 30 May 2014.

During H1-2014, 26,667 share options at an exercise price of €1.26 were exercised and the resulting cash receipt was translated into Euros as €41,187 which when rounded is reported in the above analysis as €0.0k.

 

Richard Cooper
Group Finance Director
22 September 2014

 

Consolidated Income Statement
for the six months ended 30 June 2014

		Six months ended 30 June 2014	Six months ended 30 June 2013*	Year ended 31 Dec 2013*
		(Unaudited)	(Unaudited)	(Audited)
	Notes	€000’s	€000’s	€000’s
Revenue	2	105,066	73,182	169,959
Variable costs		(48,344)	(27,632)	(67,328)
Contribution	2	56,722	45,550	102,631
Operating costs	3	(36,263)	(43,542)	(88,513)
Analysed as:
Other operating costs	3	(34,367)	(27,750)	(64,332)
Share based payments		(124)	(224)	(730)
Exceptional items	3.1	–	(13,797)	(19,711)
Depreciation and amortisation		(1,772)	(1,771)	(3,740)
Operating profit		20,459	2,008	14,118
Financial income		8	785	813
Financial expense		(855)	(934)	(1,917)
Profit before tax		19,612	1,859	13,014
Taxation charge	5	(447)	(316)	(711)
Profit after tax		19,165	1,543	12,303
Earnings per share		€	€	€
Basic
Total	6	0.315	0.032	0.225
Diluted
Total	6	0.291	0.031	0.220

*restated – see note 13 for details

 

Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2014

	Six months ended 30 June 2014	Six months ended 30 June 2013	Year ended 31 Dec 2013
	(Unaudited)	(Unaudited)	(Audited)
	€000’s	€000’s	€000’s
Profit for the period	19,165	1,543	12,303
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	–	123	359
Profit and total comprehensive income for the period	19,165	1,666	12,662

 

Consolidated Balance Sheet
As at 30 June 2014

		30 June 2014	30 June 2013*	31 Dec 2013
		(Unaudited)	(Unaudited)	(Audited)
	Notes	€000’s	€000’s	€000’s
Assets
Property, plant and equipment		864	649	918
Intangible assets		152,360	151,874	153,850
Investments	12	3,649	–	–
Total non-current assets		156,873	152,523	154,768
Receivables and prepayments	7	24,237	23,527	23,579
Income taxes reclaimable		3,881	1,582	1,877
Other tax reclaimable		201	–	306
Cash and cash equivalents	8	15,995	28,298	18,808
Total current assets		44,314	53,407	44,570
Current liabilities
Trade and other payables	9	(26,225)	(28,968)	(24,089)
Balances with customers		(13,060)	(13,807)	(13,298)
Income taxes payable		(4,946)	(2,351)	(2,722)
Other taxation liabilities		(2,344)	(671)	(4,182)
Total current liabilities		(46,575)	(45,797)	(44,291)
Current assets less current liabilities		(2,261)	7,610	279
Long term liabilities
Interest bearing loans and borrowings		(747)	–	(1,221)
Non-interest bearing loan	10	(5,352)	(7,306)	(5,148)
Deferred consideration on Betboo		(4,842)	(10,601)	(7,582)
Total net assets		143,671	142,226	141,096
Capital and reserves
Issued share capital	11	609	607	609
Merger reserve		40,407	40,407	40,407
Share premium		84,571	84,397	84,530
Translation reserve		359	123	359
Retained earnings		17,725	16,692	15,191
Total equity attributable to equity holders of the parent		143,671	142,226	141,096

*restated – see note 13 for details

 

Consolidated Statement of Changes in Equity
for the six months ended 30 June 2014

Attributable to equity holders of the parent company:

	Share Capital	Merger Reserve	Share Premium	Translation reserve	Retained Earnings	Total
	€000’s	€000’s	€000’s	€000’s	€000’s	€000’s
Balance at 1 January 2013	316	40,407	611	–	17,137	58,471
Share option charges	–	–	–	–	230	230
Lapsed share options	–	–	–	–	(6)	(6)
Share options exercised	1	–	158	–	–	159
Issue of share capital for the acquisition of Sportingbet PLC	290	–	83,628	–	–	83,918
Dividend paid	–	–	–	–	(2,212)	(2,212)
Transactions with owners	291	–	83,786	–	(1,988)	82,089
Profit and total comprehensive income	–	–	–	123	1,543	1,666
Balance as at 30 June 2013	607	40,407	84,397	123	16,692	142,226
Balance at 1 July 2013	607	40,407	84,397	123	16,692	142,226
Share option charges	–	–	–	–	506	506
Share options exercised	2	–	133	–	–	135
Dividend paid	–	–	–	–	(12,767)	(12,767)
Transactions with owners	2	–	133	–	(12,261)	(12,126)
Profit and total comprehensive income	–	–	–	236	10,760	10,996
Balance as at 31 December 2013	609	40,407	84,530	359	15,191	141,096
Balance at 1 January 2014	609	40,407	84,530	359	15,191	141,096
Share option charges	–	–	–	–	124	124
Share options exercised	–	–	41	–	–	41
Dividend paid	–	–	–	–	(16,755)	(16,755)
Transactions with owners	–	–	41	–	(16,631)	(16,590)
Profit and total comprehensive income	–	–	–	–	19,165	19,165
Balance as at 30 June 2014	609	40,407	84,571	359	17,725	143,671

Under The Isle of Man Companies Act 2006, distributions are not governed by reserves but by the Directors undertaking an assessment of the Company’s solvency at the time of distribution.

 

Consolidated Statement of Cashflows
for the six months ended 30 June 2014

	Six months ended 30 June 2014	Six months ended 30 June 2013	Year ended 31 Dec 2013
	(Unaudited)	(Unaudited)	(Audited)
	€000’s	€000’s	€000’s
Cash flows from operating activities
Cash receipts from customers	106,316	85,022	173,885
Cash paid to suppliers and employees	(84,685)	(100,106)	(181,592)
Corporate taxes recovered	–	–	1,143
Corporate taxes paid	(220)	(89)	(1,580)
Net cash from operating activities	21,411	(15,173)	(8,144)
Cash flows from investing activities
Interest received	8	5	33
Acquisition earn-out payments	(3,140)	(2,541)	(6,378)
Investment in Betit (note 12)	(3,649)	–	–
Acquisition of Sportingbet (note 12.2)	–	64,792	64,755
Non-interest bearing loan	–	8,020	8,020
Acquisition of property, plant and equipment	(229)	–	(37)
Acquisition of intangible assets	–	–	(4)
Net cash from investing activities	(7,010)	70,276	66,389
Cash flows from financing activities
Proceeds from issue of share capital	41	159	294
Repayment of borrowings (note 12.2)	–	(31,384)	(31,384)
Finance lease payments	(500)	–	–
Dividend paid	(16,755)	(2,212)	(14,979)
Net cash from financing activities	(17,214)	(33,437)	(46,069)
Net (decrease)/increase in cash and cash equivalents	(2,813)	21,666	12,176
Cash and cash equivalents at beginning of the period	18,808	6,632	6,632
Cash and cash equivalents at end of the period	15,995	28,298	18,808

 

Notes

The notes are available in the PDF download.