GVC full-year core earnings outlook beats estimates on online strength

Business News

GVC Holdings said on Thursday it expects full-year underlying core earnings to be ahead of market consensus, boosted by strong growth in its online business.

The company’s shares were up about 5 percent at 706 pence in early trading and were the biggest gainer on the FTSE midcap index .FTMC.

The British betting group now expects underlying core earnings on a proforma basis to be between 750 million pounds and 755 million pounds for the year ended Dec 31.

Analysts on average expect core earnings of 734.89 million pounds, according to Refinitiv Eikon data.

Online gaming revenue rose 15 percent in the fourth quarter, even as UK retail like-for-like gaming revenue fell 3 percent.

GVC’s results come at a time when betting companies are under increasing scrutiny by the U.S. Department of Justice which called for wider restrictions on all internet gambling earlier this week.

The group is well placed for 2019, helped by the integration of high-street brand Ladbrokes Coral and its sports betting joint venture in the U.S. with MGM Resorts International, Chief Executive Officer Kenneth Alexander said.

“We are convinced that these numbers confirm that GVC is grabbing market share in every region,” Berenberg analysts wrote in a note, growth must also have been above market levels in Germany, Italy, Brazil and all other regions. This is critical at a time when pressure from gaming taxes is intensifying, and scale helps to counterbalance their negative effect,” the Berenberg note said.