In a continuation of previous trends, GVC’s Q318 trading update has demonstrated strong growth and market share gains across all territories. Total net gaming revenues (NGR) were up 14%, driven by a 28% growth in online NGR. UK retail was only down 2%, helped by a strong FIFA World Cup. The integration of Ladbrokes (LON:LCL) is progressing well, although GVC Holdings PLC (LON:GVC) has announced that Paul Bowtell (former Ladbrokes CFO) will resign in March 2019. Our estimates remain unchanged, but there is a £20-25m risk to our EBITDA forecasts, following an anticipated increase in remote gaming duty (RGD) at the government’s budget on 29 October. The stock has fallen 19% from recent highs and trades at 10.0x EV/EBITDA and 13.0x P/E for 2018e.
Strong Q3 trading, in line with expectations
In line with our expectations, GVC produced a strong Q318 trading update, with total NGR up 14%. Online NGR growth of 28% was driven by a 31% increase in Sports Brands NGR (including a 43% growth from legacy GVC). Adjusting for the World Cup and the acquisition of CrystalBet, Online NGR was up 21%. European retail NGR grew 24%, boosted by Italy, and UK retail like-for-like NGR declined by only 2%, helped by a good second half of the World Cup. Year to date, group NGR has increased 10%, driven by a 21% growth in online NGR and a 28% growth in European retail NGR. Our estimates remain unchanged.
To read the entire report Please click on the pdf File Below: